Pension question

[gbstack]

When I start taking my pension I will take the 100% joint and survivor option. Just checking my pension information and it looks like if I die before I start taking the pension my spouse will get the 50% joint and survivor option. The difference currently would be $13,000 per year less for my wife if I die before I start taking the pension.
I'm 59 and in good health. Is it worth the risk to keep waiting? The pension will grow by around 6% per year if I wait.

[jebmke]

Quote:

Originally Posted by gbstack When I start taking my pension I will take the 100% joint and survivor option. Just checking my pension information and it looks like if I die before I start taking the pension my spouse will get the 50% joint and survivor option. The difference currently would be $13,000 per year less for my wife if I die before I start taking the pension. I'm 59 and in good health. Is it worth the risk to keep waiting? The pension will grow by around 6% per year if I wait.

I think the answer depends on whether you have other assets/income sources that would protect your wife if you died before the pension started, as well as her expenses vs. the 50% survivor portion.

[pb4uski]

Never thought of that situation. I would suggest that you check with your pension provider to confirm your understanding and see if there are any options you can elect now to increase her benefit.

The probability that you will die between 59 and 65 is low compared to the probability that you will survive to 65 or whatever age you pension maxes out so it you are an averages player you should wait. If you are risk averse you should consider starting it early.

I'm going to now have to go and check what my plan does in such situations.

[savory]

My pension had a few more options. I took the 100% joint survivor benefit at 59 with a SS bump-up until 62. I can't remember the exact analysis but by doing it this way, I am ahead until about age 80 or 85 vs. taking the payout at 65. I do not remember if my pension had a 'penalty' if I should die first. I think the pension folks liked this as I expect they will have to pay out less in the end. However, it works with my income and cash flow. I am sharing this in case their is another approach to consider in your plan.

[ERD50]

You could buy term insurance to cover that time frame.

-ERD50

[gbstack]

Thanks for all the information. It is greatly appreciated.