Pension

• A pension is the benefit paid from a defined benefit plan. The pension usually comes in the form of an annuity.
  
  

Pension Benefits

• The annuities can be paid as single life (for the life of the participant) or joint and survivor (for the life of the participant and then a surviving spouse).
  
  

Annuity

• Annuities are not only bought to pay pension benefits; any person can purchase an annuity from an insurance company for any reason. Most often, they are to provide a guaranteed monthly income in retirement or to a child or spouse.
  
  

Annuity Types

• In addition to single life and joint and survivor, there are certain and life annuities. Certain and life are guaranteed for a time, such as 10 years (even if the recipient dies) and then for the remainder of his life.
  
  

Significance

• Annuities, whether from a pension or not, are an excellent way to provide a floor benefit in retirement or to provide income security to a dependent.