What Are Annuity Detail Under SPP?
We are here to talk with you today about annuities offered by SPP. The last thing you want to do as a retiree is to run out of money; Annuities are a way to make sure that you have enough cash to last through your golden years. Let’s start with
What is an annuity?
An annuity is a contract that provides guaranteed stable monthly income for life. SPP offers three types of annuities; each of these pays a fixed monthly benefit for your lifetime. When you choose an annuity all the investment decisions are made by SPP which makes it worry free for you. It’s kind of like getting a monthly paycheck for life.
- The first annuity offered by SPP is the Life Annuity; this option provides the highest monthly payment as it offers coverage for you as an individual while you’re alive. There are no survivors or death benefits payable and all payments stop when you die.
- The Refund Life Annuity option provides a monthly payment for your lifetime with the added guarantee that a death benefit will be paid to your beneficiary if you have not received your balance. At retirement, you specify the beneficiary which can be updated any time before your death.
- The Joint and Last Survivor Annuity option provides a monthly payment for your lifetime and after your death, your surviving spouse or common-law partner receives a monthly benefit for the rest of his or her lifetime. Joint Life annuities usually pay less per month than other annuities because the guaranteed income has to take into account both your life and your spouse’s life expectancy.
The continuing benefit for your joint survivor is 100%, 75% or 60% of your monthly pension as chosen at retirement. Annuities take the uncertainty out of converting your retirement savings into retirement income. If you purchase an annuity you don’t have to decide how to invest your money.
You don’t have to worry about market volatility and you don’t have to worry about outliving your money because SPP guarantees your monthly annuity payment as long as you live. As you have heard there are things to consider when buying an annuity? It doesn’t need to be overwhelming; we have people at SPP who are here to answer your questions. There’s also information on our website that can help you learn more, too. We want to help you get as much information as possible about this very important decision so that you can enjoy the benefit of all the funds you’ve worked so hard to save.