For a retiree seeking the highest payment over 20 years from an SPIA, which payout option is best?

In the context of a retiree looking for the highest payment over a fixed period of 20 years from a Single Premium Immediate Annuity (SPIA), the choice of a 20-year period certain annuity is the most suitable option. This type of annuity guarantees payments for a specified period—20 years in this case—regardless of whether the annuitant passes away before the period ends.

By opting for a 20-year period certain annuity, the retiree maximizes the periodic payments that can be expected, as the structure of this payout option is designed to provide a fixed amount for the entirety of the guaranteed period, ensuring that the retiree receives consistent income.

In contrast to other options, like life income variants, these typically involve a trade-off where the payments may be lower because they are designed to last for the annuitant’s lifetime and may include features that provide additional benefits, such as a death benefit or inflation adjustments. While these features can be valuable for some individuals, they may not yield the highest payments for the fixed 20-year horizon sought by the retiree.

The 20-year inflation-adjusted annuity and the life with installment refund annuity also incorporate elements that could reduce the monthly