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Old 01-25-2016, 05:27 PM   #61
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since alimony is tax deductible and a lump sum payment is not, how is the annuity handled in the divorce?
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Old 01-25-2016, 05:34 PM   #62
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Agree with Harry.... sounds like it would be unfavorable to get her off your back by buying her an annuity. You might be able to buy an an annuity and have the benefits assigned to her (paid to her) and therefore the benefits paid would be tax deductible for you. Or worst cash have the benefits sent to your bank and then have a corresponding autopay to her so you can get the tax deduction (offset by interest income from the annuity). YMMV.
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Old 01-25-2016, 06:16 PM   #63
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3 years, I would say the the 7 last years inflation has been fairly tame. Inflation has aveaged less than 1.7 since 2008. Sounds more like a spending problem or a planning problem.

Historical Inflation Rates: 1914-2016 | US Inflation Calculator
Government numbers probably don't reflect one's personal inflation rate.
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Old 01-25-2016, 06:56 PM   #64
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since alimony is tax deductible and a lump sum payment is not, how is the annuity handled in the divorce?
I believe Danmar is Canadian. I don't think US tax codes apply.
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Old 01-26-2016, 09:22 AM   #65
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since alimony is tax deductible and a lump sum payment is not, how is the annuity handled in the divorce?
Yes, alimony is fully taxed and deductible in Canada while lump sums are not, so I equate the after tax amounts she receives. Eg if she gets $1,000 after tax now (I wish), I buy an annuity that pays her the same after tax amount. In Canada there is a prescribed amount of an unregistered annuity that is taxed. For a female that is 70 years old about 10% of her annuity would taxed.

I had the foresight of including this option in our final agreement as I didn't want this monkey on my back and potentially my current wife's back. X wife's mother is still alive and very healthy at 96!!
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Old 01-26-2016, 10:32 AM   #66
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I didn't join the pension plan until after we separated. See got some of my CPP (like SS) but that was immaterial compared to my company pension.
Mine got 46% of the company pension but her lawyer missed her share of CPP and Airline Frequent Flyer points. It was 100% joint survivor so if I outlive her, I can afford LTC!
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Old 01-26-2016, 11:03 AM   #67
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Mine got 46% of the company pension but her lawyer missed her share of CPP and Airline Frequent Flyer points. It was 100% joint survivor so if I outlive her, I can afford LTC!
That's interesting. So if you outlive her, the 46% comes back to you? The CPP ends up getting shared for the years a couple is together. My X worked for some of those years so the effect wasn't that much. I think total effect for me is only a couple hundred dollars a month. As far as frequent flier points go, they tried to get half of mine but on the fate of separation I didn't have hardly any. Talk about petty!
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Old 01-26-2016, 02:38 PM   #68
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That's interesting. So if you outlive her, the 46% comes back to you?..........
This just happened to a friend of mine - his ex died and her piece of his pension reverted back to him.
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Old 01-26-2016, 02:52 PM   #69
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This just happened to a friend of mine - his ex died and her piece of his pension reverted back to him.
in a plan subject to ERISA, once the pension has commenced the annuity is generally divided based on the original payment form. this is called a "shared interest" benefit. so for example, if a couple is receiving straight life annuity of 1000 a month and they get divorced (hey, who knows why it took 51 years of marriage to call it quits) and as a result of the settlement, the spouse gets 600 a month - that is payable as long as he/she lives and if he/she predeceases the plan participant, the 600 reverts back to the participant. if the participant predeceases the spouse, the whole thing stops
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Old 01-27-2016, 08:26 AM   #70
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That's interesting. So if you outlive her, the 46% comes back to you? The CPP ends up getting shared for the years a couple is together. My X worked for some of those years so the effect wasn't that much. I think total effect for me is only a couple hundred dollars a month. As far as frequent flier points go, they tried to get half of mine but on the fate of separation I didn't have hardly any. Talk about petty!
Yes I was married when early handshake at age 49 so shared the pension for the time I worked as married. It is 100% joint survivorship. She even shares my extended medical which was struck upon retirement.
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Old 01-27-2016, 01:01 PM   #71
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in a plan subject to ERISA, once the pension has commenced the annuity is generally divided based on the original payment form. this is called a "shared interest" benefit. so for example, if a couple is receiving straight life annuity of 1000 a month and they get divorced (hey, who knows why it took 51 years of marriage to call it quits) and as a result of the settlement, the spouse gets 600 a month - that is payable as long as he/she lives and if he/she predeceases the plan participant, the 600 reverts back to the participant. if the participant predeceases the spouse, the whole thing stops
Maybe a little more on that?

Let's say the worker retires and selects a benefit with a survivor option. Maybe $1000 / mo while the worker lives, then $750 / mo to the spouse if the worker dies before the spouse.

If the worker dies first, will the company pay the $750 to the spouse?
Or, will the company say a divorced person can't collect the "spousal survivor benefit"?
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Old 01-27-2016, 01:29 PM   #72
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Maybe a little more on that?

Let's say the worker retires and selects a benefit with a survivor option. Maybe $1000 / mo while the worker lives, then $750 / mo to the spouse if the worker dies before the spouse.

If the worker dies first, will the company pay the $750 to the spouse?
Or, will the company say a divorced person can't collect the "spousal survivor benefit"?
it will depend on the provisions of the QDRO but in a shared interest arrangement, I think it's the former

YYMV, do not construe this as legal advice, etc.
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Old 01-28-2016, 07:26 PM   #73
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it will depend on the provisions of the QDRO but in a shared interest arrangement, I think it's the former

YYMV, do not construe this as legal advice, etc.
Thanks.
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