A "joint and survivor" annuity is an insurance policy that pays you and your spouse/partner income while one of you remains alive. It pays nothing to heirs once you are both deceased. A "single life" annuity pays income only when the named annuitant is alive and pays nothing to a spouse/partner or to any other heirs once that person dies. Hence, both joint-and-survivor and single-life annuities are risky with respect to loss of income to survivors.

In the extreme, if a single-life annuitant dies immediately after buying the policy, all the money spent on the policy will remain with the insurance company and be lost to the annuitant's spouse/partner, children and other heirs.

A second risk involves the possibility that the insurance company will fail, in full or in part, and not be able to make full annuity payments. The only way to limit that risk is to purchase annuities from more than one insurance company.

A third risk involves inflation. Our maximization calculations consider nominal annuities, whose payments are not adjusted through time for inflation. Such annuities are not protected against inflation even if they are graded and rise at a fixed rate each year. They will lose purchasing power whenever prices rise.

If you turn on annuitization to include it when maximizing your lifetime spending, the program will, if you have a spouse or partner, consider joint-and-survivor annuities. If you'd prefer to have the program consider single-life annuities, please specify this under Settings and Assumptions.