QJSA: Qualified joint and survivor annuity explained

A qualified joint and survivor annuity (QJSA) is the common payout method for most married couples.

The point of a QJSA is straightforward: It guarantees that both you and your spouse receive lifetime retirement income and that payments continue after one spouse passes away. This rule protects surviving spouses financially after the primary annuitant dies.

This guide explains the meaning of a QJSA, how joint and survivor payments work, and how couples can assess different payout levels before retirement.    

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What is a qualified joint and survivor annuity?

A QJSA is an annuity payout method for married participants. It ensures that when the primary annuitant begins receiving annuity payments, those payments continue for the rest of their life. Then, after they pass away, a predetermined percentage of that payment goes to the surviving spouse for their lifetime. It guarantees retirement income for two people, not just one.

You’ll find QJSAs in defined benefit plans (traditional pensions), money purchase plans, and certain 401(k) and 403(b) plans when the account is converted to annuity payments.

QJSAs are built around two people:  

• Primary annuitant: Usually the retired employee.
• Joint annuitant: Typically the spouse or partner.

No matter who passes away first, the surviving spouse sees annuity payments, helping maintain long-term financial stability.

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How a qualified joint and survivor annuity works

A QJSA pays income in two phases: when both spouses are alive and the period after one spouse passes away.

Here’s how the QJSA structure works:

Payments begin during retirement: QJSA payouts typically start when the primary annuitant retires and chooses to receive benefits from a qualified retirement plan.

Payments continue for the primary annuitant’s lifetime: Similar to a traditional pension, the QJSA makes regular annuity payments for life to the primary annuitant, based on actuarial calculations that factor in:

• The primary annuitant’s life expectancy
• The joint annuitant’s life expectancy
• The survivor percentage selected (50%, 75%, 100%), dependent on plan rules

The surviving spouse continues receiving income: If the primary annuitant dies, the plan switches to survivor benefit mode. The surviving spouse receives annuity payments for life. The amount depends on the elected survivor percentage: 50%, 75%, or 100%.

Payments only stop after both annuitants pass away: A QJSA doesn’t pay past the surviving spouse’s lifetime. Once both annuitants die, annuity payments end.  

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Benefits of a qualified joint and survivor annuity

A QJSA includes several built-in benefits that give married couples certainty in retirement..

Lifetime income for both partners

It doesn’t matter who dies first. As long as one annuitant is alive, retirement income persists. If you’re worried you’ll outlive your savings or fail to provide for your spouse after your death, a QJSA helps to address that concern.

Predictable income unaffected by market fluctuations

QJSA annuity payments don’t ebb and flow with the stock market. You receive a fixed amount every month, regardless of market volatility, interest rate changes, or broad economic conditions. This stability helps retirees plan their budgets with confidence.

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Drawbacks of a qualified joint and survivor annuity

A QJSA provides lifetime income protection for married couples. However, they come with tradeoffs. Before choosing one, consult your financial advisor and consider how guaranteeing income for two participants’ lifetimes can have downsides.  

Monthly payments are usually lower

A QJSA guarantees income over the lifespans of two annuitants. So monthly payments tend to start lower than a single life annuity. If you need the highest possible monthly income in retirement, a QJSA might not work as well as other strategies.

Lack of flexibility

Once QJSA payments start, you’re locked in. You can’t switch to a lump sum or change the survivor percentage. If your financial picture changes, you must live with annuity payouts you originally chose.  

Survivor benefits can be less than expected

Unless retirees choose otherwise, many plans may default to a 50% joint and survivor annuity benefit. Couples who assume a full payout after the primary annuitant dies often misunderstand that they need to proactively pick a higher percentage during retirement. On the downside, choosing a higher survivor percentage further reduces initial monthly income.  

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Payment options: 50%, 75%, and 100%

Qualified joint and survivor annuities let couples choose the level of survivor protection they’d like. Higher survivor percentages offer stronger protections but reduce the starting payment.

50% Option

This is the minimum amount allowed by the IRS and means the survivor receives half of the original monthly payment for their lifetime. With relatively higher starting payments, the 50% option can make sense for retirees who expect other sources of retirement income, such as Social Security, part-time work, or other savings.  

75% or two-thirds options as midpoints

Some QJSAs offer a middle ground survivor percentage, typically 75% or two-thirds. These options provide more survivor protection than the 50% election but avoid the larger reduction tied to the 100% option. They can provide a balanced approach for couples who want moderate survivor income.

100% Option

The 100% joint and survivor annuity means the survivor benefit is equal to the monthly annuity payment when both spouses were alive. It can be the strongest form of protection from a planning and predictability standpoint. But it also results in the lowest monthly payment of all of the options due to the longer expected payout period.  

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Maximize retirement benefits with Gainbridge annuities

A QJSA gives couples retirement income that lasts as long as either spouse is alive. This structure can ensure survivors continue receiving annuity payouts no matter who dies first. While QJSAs reduce the monthly payment compared to a single life annuity, they offer the long-term stability many retirees seek.

If you’re looking for potentially more flexibility than the joint and survivor options provide, fixed annuities from Gainbridge provide fixed-rate growth, principal protection, and guaranteed retirement income — all with no hidden fees or commissions.      

For QJSA alternatives, explore Gainbridge today and compare annuities side-by-side to find options that make sense for your retirement plan.

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FAQ

What is a qualified joint and survivor annuity waiver?

A QJSA waiver is a legal document a spouse must sign if one half of a couple prefers a payout option other than the default under federal law. If a spouse doesn’t waive their right, the plan must pay retirement benefits as a joint and survivor annuity. Learn more on this here.  

What is a joint annuitant?

A joint annuitant is the spouse or partner who shares lifetime annuity payouts with the primary annuitant. In a QJSA, both annuitants receive income, even after one spouse passes away.  

What happens to a joint and survivor annuity if a couple gets divorced?

A divorce doesn’t automatically cancel a joint and survivor annuity. Under federal retirement plan rules, a QJSA remains in effect unless the divorce decree includes a Qualified Domestic Relations Order (QDRO) that instructs the plan administrator to change the beneficiary or payout structure. Without a QDRO, the former spouse may still legally be the joint annuitant, entitling them to survivor benefits when the primary annuitant dies.      

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This article is intended for informational purposes only. It is not intended to provide, and should not be interpreted as, individualized investment, legal, or tax advice. For advice concerning your own situation please contact the appropriate professional. The GainbridgeⓇ digital platform provides informational and educational resources intended only for self-directed purposes. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

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