Single vs. Joint Life Annuities

Each year, more retirees find it challenging to ensure long-term income for their spouses. As pension plans disappear and employers shift toward 401(k)s and other defined-contribution plans, guaranteed income options have become less common. Add to that changes in Social Security claiming strategies, and many couples now have fewer options for spousal support in retirement.

This raises a critical planning question: how can you help ensure your spouse has reliable income if you pass away first? For many, joint life annuities provide a dependable solution. But that doesn’t mean they’re right for everyone. In certain situations, two single life annuities—or another approach—may offer greater flexibility or higher payouts.

Whether a single or joint annuity makes more sense depends on your specific goals, financial situation, and retirement timeline. The following guide outlines key differences, benefits, trade-offs, and scenarios to help you make a confident decision.

How Joint and Single Life Annuities Are Different

First, let’s define the two options. A joint life annuity provides income to two people—typically spouses. The primary annuitant receives payments first. When they pass away, the surviving joint annuitant continues receiving payments. These may be the same or reduced, depending on the contract terms.

By contrast, a single life annuity provides income for just one person. Payment terms depend on the payout structure chosen within the contract. Here are some typical options:

• Lifetime income only (annuitized payments)
• Life annuity with period certain (guaranteed for a set number of years)
• Withdrawals through an income rider without full annuitization

Each structure has unique implications for payout size, beneficiary rights, and control of remaining funds.

Feature	Single Life Annuity	Joint Life Annuity
Number of Payees	One	Two
Payment Duration	For life of primary annuitant	For life of both annuitants
Payout Amount	Higher	Lower
Spousal Income Protection	Not guaranteed	Yes, built-in
Beneficiary Rights	Depends on structure	Typically passes to joint annuitant

Single and Joint Annuities: Benefits and Trade-Offs

With any annuity, you’re balancing risk and reward. Joint life annuities transfer more longevity risk to the insurer by covering two lives. As a result, monthly payments are typically lower than single life annuities.

Single life annuities offer higher payouts because they’re based on one person’s life expectancy. That also means more risk if the annuitant dies early—especially with lifetime-only options, where remaining funds revert to the insurance company.

Age plays a major role in pricing. The older you are, the higher your payout (since fewer payments are expected). For joint life annuities, insurers use the age of both annuitants. If there’s a significant age gap, payments are usually reduced due to longer expected payout periods.

Another factor: timing. Many couples don’t retire at the same time. According to the Center for Retirement Research at Boston College, only 20% of couples retire in the same year. That means income needs may differ by spouse—and could favor single annuities for flexibility.

What Are Some Other Situations to Consider?

Here are situations where a single or joint annuity may be more appropriate, depending on goals and circumstances:

Situation	May Favor…	Why
Both spouses are high earners with separate assets	Single Life Annuity	Each person maximizes their income, and may not rely on survivor benefits
Desire for simplicity and single contract	Joint Life Annuity	Easier to manage, covers both lives automatically
One spouse is the primary income earner	Joint Life Annuity	Ensures continued income for the surviving spouse
Large age difference between spouses	Single Life Annuities	Joint payout reduced due to longer projected payout window
Desire to maximize monthly income	Single Life Annuity	Higher payments with fewer guarantees

Tax Considerations and Non-Qualified Contracts

If your annuity is non-qualified (funded with after-tax money), there are additional factors to weigh—especially around required minimum distributions (RMDs) and ownership.

With jointly owned non-qualified annuities, RMD rules may trigger when the first owner dies. The surviving spouse may need to begin RMDs or liquidate assets, creating taxable income—possibly unintentionally.

In contrast, single-owner annuities with a spousal beneficiary may allow for “spousal continuation.” This means the surviving spouse can assume ownership of the annuity, delay RMDs, and preserve tax-deferred growth.

For this reason, structure and ownership setup matter. If you’re concerned about the tax implications of joint ownership, a single life annuity with spousal continuation provisions might offer more flexibility.

Final Thoughts on Choosing the Right Annuity

There’s no one-size-fits-all answer. The decision between single and joint annuity payouts should reflect your retirement timeline, income goals, spousal needs, tax planning, and financial confidence.

A licensed professional can walk you through personalized illustrations to compare your options side by side. Be sure to consider payout differences, survivor protections, age gaps, and ownership structures before finalizing a strategy.

At Foxcove Financial, we help clients weigh these trade-offs with clarity—so their retirement income plan works for today and whatever comes next.