[vc_row][vc_column width=”2/3″ el_class=”section section1″][vc_column_text]If you are planning and saving for retirement for only yourself, the ideal option may be a single life annuity. However, the beneficiaries will never receive any payment as those end when the investor passes away. â €However, the single life annuity plan can ensure you with a steady stream of income that can be paid out monthly throughout your lifespan. The payouts cease once the annuity owner dies. Just like anything, there are pros and cons. We will go over how this type of annuity operates and the important need to knows.
A single-life annuity is just one of many life annuity products out there that people use to help supplement their retirement. The single life annuity provides the largest monthly payments compared to all the other varieties of annuities.
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This can be an issue if the owner of the annuity is married, and the spouse is dependent on the payments from the annuity as well. This is why this kind of annuity is usually not the best option for those that are married.
There are many various kinds of annuities that can often cover the shortfalls of a single life annuity plan.
The most popular type of single life annuity is an annuity called joint and survivor. The insurance company distributes the monthly payouts until the investor and the beneficiary dies. Usually, the spouse is the beneficiary of this type of plan. Therefore, the joint and survivor annuity supports the retirements of the married couple.
Nevertheless, the joint and survivor annuity has a possible downside. The regular monthly payments for the same dollar amount of a single life annuity will be lower on a joint and survivor annuity. However, there is another type of annuity that may help some duration of time.
This alternative is called life plus period certain or period certain annuity. If you buy either of these types annuities and end up perishing before a specified period of time, the beneficiary of the annuity will receive payouts until the duration specified ends. A period certain usually lasts anywhere from 10 to 20 years.
This annuity type supports the survivor if the annuity owner dies prematurely. Because the payouts generally cease when the investor is dead, this annuity also has a lower value than the standard single life annuity plan.
This annuity actually helps the annuity buyer receive a higher payback on the acquisition of the annuity amid an early death by the ongoing payments to a survivor for a set amount of year. Annuity holders, though, will need to be aware of the potential tax penalties of the larger returns.
Because they offer the largest monthly payments, single life annuities are probably an excellent choice for unmarried people that are very close to retiring or at the age of retirement.
Annuities are not really recommended to those that are still at the young working age of their 20s or 30s. They are better off saving into traditional vehicles such as a 401(k) or Roth.
People between the ages of 55 and 75 can take the most advantage from an annuity with its ensured income benefit. This annuity is safeguarded from volatile or bad market performances. Those that are over the age of 75, unfortunately, may not have the time for annuities to be beneficial for them. This is because these plans are significantly higher in expenditure in comparison to other retirement supplement products.
A single-life annuity can be a terrific for a married couple that has other retirement income vehicles, as this investment can give them larger payments during the period that each individual is alive. Once the investor passes away, the cost of living of the surviving individual will more than likely be less in expenses.
As stated before, for married couples, particularly those with a small amount of retirement savings, single life annuities would not be the best idea for them. However, for couples that have another income vehicle or more during their retirement, a single life annuity can probably be beneficial for them.
If a surviving spouse can or will receive another stream of income, the single life annuity can be a sensible choice as it payouts much higher. But if the single life annuity is the only source of money during retirement, the couple will want to look into a joint and survivor annuity instead.
Also, for those that want to pass down an inheritance to beneficiaries that are not their partners, a single life annuity is not the plan for them. If a retiree or someone that is planning for retirement is wanting to leave assets or benefits behind, they will want to research annuities that provide lump-sum payouts or continuous disbursements after the death of the annuity owner.
Single life annuities provide the largest annuity payments out of any other kinds of annuity. But the downside is that after the annuity holder’s death, the insurance company does not continue the payments to the survivors of the investor.
For those that want to take care of their surviving spouse or beneficiaries, they will need to look into other annuities. Joint and survivor or period certain annuities would probably be a better fit for them.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”37156″ img_size=”292×285″ style=”vc_box_shadow”][/vc_column][/vc_row]
