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Joint And Survivor Annuity

What is a 'Joint And Survivor Annuity'

A joint and survivor annuity is an insurance product that continues regular payments as long as one of the annuitants is alive. A joint and survivor annuity must have two or more annuitants, and is often purchased by married couples who want to guarantee that a surviving spouse will receive regular income for life. Annuities are generally used to provide a steady income during retirement.

Explaining 'Joint And Survivor Annuity'

With a joint and survivor annuity, monthly payments are typically reduced by one-third or one-half for the surviving annuitant. For example, Sarah and Paul’s joint and survivor annuity pays them $6,000 monthly. When Sarah dies, Paul receives $2,000 - $ 3,000 monthly. The terms of the annuity payout depend on the source of the funds and options chosen before payments begin.

Guaranteed Payment of Principal

If an annuity purchased through an insurance company has an installment refund provision, the company must pay out an amount equal to the original value of the annuity. If both annuitants die before monthly payments have exceeded the principal, monthly payments continue going to the annuitants' estate or to a named beneficiary. Also, if an annuity has a cash refund provision, and both annuitants die before monthly payments have exceeded the principal, the balance of the principal is paid to the annuitants’ estate or to a named beneficiary in a lump sum.

Example of Joint and Survivor Annuity

In July 2016, Rep. Joseph Crowley, D-N.Y. introduced legislation to improve access to retirement savings plans in the workplace. The Secure, Accessible, Valuable, Efficient Universal Pension Accounts, or SAVE UPs Act, would require small businesses of 10 or more employees without a current retirement plan to enroll each employee in an individualized retirement account. Employees could defer up to 3% of annual income into their accounts. The amount would increase by 0.5% annually and stop at 5%. Benefits would be paid in the form of a qualified joint and survivor annuity as defined under the Employee Retirement Income Security Act. Participants could choose to start drawing benefits after age 62 but before age 70.


Further Reading


Economic security in retirement: How changes in employment and marriage have altered retirement‐related economic risks for women
www.tandfonline.com [PDF]
… of women and men; married women's incomes (and assets) are combined with any jointly‐owned income … are strictly constrained by the Employee Retirement Income Security Act to offer a joint and survivor pension that pays at least a 50 percent survivor benefit as a …

Financial education and annuitiesFinancial education and annuities
www.oecd-ilibrary.org [PDF]
… of women and men; married women's incomes (and assets) are combined with any jointly‐owned income … are strictly constrained by the Employee Retirement Income Security Act to offer a joint and survivor pension that pays at least a 50 percent survivor benefit as a …

Financial innovation for an aging worldFinancial innovation for an aging world
www.nber.org [PDF]
… of women and men; married women's incomes (and assets) are combined with any jointly‐owned income … are strictly constrained by the Employee Retirement Income Security Act to offer a joint and survivor pension that pays at least a 50 percent survivor benefit as a …

Social Security: A financial appraisal for the median voterSocial Security: A financial appraisal for the median voter
heinonline.org [PDF]
… of women and men; married women's incomes (and assets) are combined with any jointly‐owned income … are strictly constrained by the Employee Retirement Income Security Act to offer a joint and survivor pension that pays at least a 50 percent survivor benefit as a …

Lessons from behavioral finance for retirement plan designLessons from behavioral finance for retirement plan design
books.google.com [PDF]
… of women and men; married women's incomes (and assets) are combined with any jointly‐owned income … are strictly constrained by the Employee Retirement Income Security Act to offer a joint and survivor pension that pays at least a 50 percent survivor benefit as a …

Longevity risk in pension annuities with exchange options: The effect of product designLongevity risk in pension annuities with exchange options: The effect of product design
www.sciencedirect.com [PDF]
… of women and men; married women's incomes (and assets) are combined with any jointly‐owned income … are strictly constrained by the Employee Retirement Income Security Act to offer a joint and survivor pension that pays at least a 50 percent survivor benefit as a …

Economic security planning method and systemEconomic security planning method and system
patents.google.com [PDF]
… of women and men; married women's incomes (and assets) are combined with any jointly‐owned income … are strictly constrained by the Employee Retirement Income Security Act to offer a joint and survivor pension that pays at least a 50 percent survivor benefit as a …

Social security: A financial appraisal across and within generationsSocial security: A financial appraisal across and within generations
www.nber.org [PDF]
… of women and men; married women's incomes (and assets) are combined with any jointly‐owned income … are strictly constrained by the Employee Retirement Income Security Act to offer a joint and survivor pension that pays at least a 50 percent survivor benefit as a …


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