What is "five year certain benefit"?r=1217941756

Question

this is relative to optional withdrawal from a retirement plan

Answer 1

It's generally the type of term you hear when considering setting up monthly payments from a pension plan or insurance annuity contract.  It means that a certain monthly amount is guaranteed for five years, to you or your beneficiary.  Payments will continue after five years for as long as live, terminating when you die.

It may be helpful to get some professional advice on this.  These types of decisions are usually irrevocable and will have long-term implications for yourself and any beneficiaries.

Answer 2

It means regardless if you pass away, the benefits will be paid for five years from the starting date.

Answer 3

A five year certain benefit relates to annuitizing your retirement benefit. When you annuitize it means that you “flip the switch” and start taking income from your retirement plan in the form of an annuity.

When you annuitize, you tell the retirement plan to start paying you. When you make the choice to annuitize, you also decide how the payments should be structured. You can choose a variety of options including the five year certain benefit.

The option you are asking about is called Period Certain. This means you can take your money out over a period of 5, 10, 15, or 20 years. The retirement plan guarantees to pay out all your money (plus interest) over that period. If you do not live to the end of the period, your beneficiary gets the remaining money in your annuity over the balance of the period. Live or die, you or somebody else gets back all your money.