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A married couple with only one spouse currently working outside the home plans to retire in...

A married couple with only one spouse currently working outside the home plans to retire in several years. An annuity that would be particularly suitable for saving for that retirement would be

1. a straight life annuity on the life of the working spouse,

2. a straight life annuity on the life of the nonworking spouse,

3.a deferred joint and survivor annuity,

4.an immediate joint and survivor annuity.

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Answer #1

Best option would be Option 3.

Joint and survivor annuity keep providing income stream as long as one spouse lives. i.e. even if one person dies, the other person keeps getting the income.

Also, deffered annuity means that the payment for retirement plan can be made in a series of payment, which could be monthly or yearly. As against immediate annuity where the whole payment has to be made upfront, which would be difficult for this couple as only one of them is working.

option 1 and 2 are not recommended becasue the retirement benefit will stop in that case when 1 spouse dies. This will leave the other spouse income less.

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