The question was: When should I consider recommending that my clients take a period certain annuity option when taking retirement distribution from their defined benefit plan? What about when they take distribution from a defined contribution plan like a 401(k)?
The answer is: "Typically plans offer, as an option to the joint and single life annuity, a period certain annuity. A period certain annuity provides payments for a specified period of time–usually 10 to 20 years–even if the participant, or the participant and spouse, die before the end of that period.
"Thus the period certain annuity provides benefits for the participant's heirs even if the participant (or participant and spouse) die early.
"Because of this guarantee feature, the annual or monthly payments under a period certain option are less than they would be under an option where payments end at death.
