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Old 01-31-2012, 02:12 PM   #21
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I went through this a few months ago. I'm glad I'm not an actuary. I had always thought I'd use a single life option, but after much pulling of hair and gnashing of teeth, I settled on the two-life option as have many on this thread. My pension is a fraction of yours and non-COLA's, but hey, every little bit helps. I decided that if I die first, and I'm 7 years older than DW, I would want her to get the maximum amount. It's hard and expensive to find a younger man to run around with at her age. Bottom line is to go with the decision you can sleep with the best.

Can't you see yourself in the nursing home saying, " Darn! Wish I'd spent more time at the office instead of wasting time with family and friends."
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Old 01-31-2012, 03:04 PM   #22
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Originally Posted by retiredncolorado View Post
I took option 1. Also, in Colorado my DW dies first the amount reverts to the option 2 amount. I would imagine California has some similar provisions.
Yes, that is a sub option of both choices I listed. I just didn't want to confuse things past the primary concern of the basic issue.

But, now that that's out of the way and I'm going to select the dual life option, option 1, I now need to decide if it makes sense to go with 1 or 1W

1. Pension covers both our lifetimes.

1W. Pension covers both our lifetimes just like option 1 but if I outlive DW, then it defaults up to the single man's amount.

For option 1W there is a cost of course. It's $50 a month less pension that option 1 and provides an additional $300 in pension to me as the survivor. (5%)

Option 1 is about $6,000 a month and so option 1W is $5,950 a month, with a bump to $6,600 (single man's option) if DW goes first. (a 10% bump up from the dual life option.) It's a coin toss who will outlive who. (Although I do take more risks; ride dirt bikes, street bikes, ski, hunt, lots of power tools, etc)

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Option 2
Old 01-31-2012, 07:19 PM   #23
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Option 2

I E/R'd 2 yrs ago at 52 with a very similar situation as you, although numbers close, not quite at yours. The difference though in option 1 and 2 in my case, was $650. I chose option 2 and was able to buy a 1 mil term insurance policy for $250 a month, for a net $400 a month, "freebie." In your case, I wouldn't think twice selecting option 1 for the $300 and peace of mind....good luck and well done!! go out there and enjoy!!!!

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