Joint-Life Payout

Written By
Paul Tracy
Updated July 20, 2021

What is a Joint-Life Payout?

A joint-life payout is a retirement-benefit payout method whereby a retiree receives benefits from the retirement plan until he or she dies, and the retiree's spouse or partner then receives benefits from the same plan until he or she dies too.
 

How Does a Joint-Life Payout Work?

Let's say John Doe buys an annuity with a joint-life payout. Ten years later, he retires and annuitizes the contract, which means he tells the annuity provider that he would like to begin receiving benefits. He receives monthly payments of, say, $1,800, which he and his wife use to support themselves in addition to Social Security.

This goes on for 20 years, and then John dies of a heart attack. Because the annuity has a joint-life payout, the payments do not end. Instead, John's wife continues receiving $1,800 a month, even though the annuity was in his name.

Why Does a Joint-Life Payout Matter?

In a joint-life payout, the checks keep coming as long as at least one of the two spouses is alive. In turn, joint-life payouts guarantee income for a person's spouse or partner after the person dies. They can secure the future of a person who has not worked outside the home for several years or who would not have income without the support of the retiree. The option is in contrast with the single-life option, which ceases benefit payments after the retiree (in our example, John Doe) dies.

It is important to note, however, that joint-life payouts cost extra, sometimes in the form of lower monthly payments or higher fees. That's because the pension or annuity must base its payments on the life expectancies of two people. Also, the survivor's monthly benefits are often less than the amount the retiree receives.
 

 
Activate your free account to unlock our most valuable savings and money-making tips
  • 100% FREE
  • Exclusive money-making tips before we post them to the live site
  • Weekly insights and analysis from our financial experts
  • Free Report - 25 Ways to Save Hundreds on Your Monthly Expenses
  • Free Report - Eliminate Credit Card Debt with these 10 Simple Tricks
Ask an Expert
All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Joint-Life Payout.
Be the first to ask a question

If you have a question about Joint-Life Payout, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

If you have a question about Joint-Life Payout, then please ask Paul.

Ask a question Read more from Paul
Paul Tracy - profile
Ask an Expert about Joint-Life Payout

By submitting this form you agree with our Privacy Policy

Don't Know a Financial Term?
Search our library of 4,000+ terms