pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Let's say that you select the single life option that pays $5,296/month and die the next day and your DW is then 60yo female living in VA. According to immediateannuities.com a SPIA that pays a 60yo female in VA $4,813/month would cost $886,000.
Can you buy life insurance with a $886,000 death benefit for the extra $483/month that you will be collecting with the single life benefit? Probably not.
But the amount that is needed to buy a SPIA providing $4,813/month will decline as you both get older.
So then you can refine it by saying that the SPIA to provide $4,813/month will only cost $731k when she is 70 and would only cost $527k when she is 80... so you could use a ladder of a 30 year policy for $527k, a 20 year term life policy for $204k and a 10 year life term policy for $155k... can you buy that package of policies for $483/mo (or less)? Perhaps.
When I went through it it seemed that at best it might be close but it would be unnecessarily complicated compared to the 100% joint option. If the using the excess of the single life option over the joint life option to buy life insurance on me to fund the benefit once I pass had been compelling then I probably would have considered it, but it wasn't and that made the decision for us.
Not to mention even if it did have a little benefit explaining the strategy and its complexity to DW to get her buy in to sign off on the single life pension... not worth the trip!
Can you buy life insurance with a $886,000 death benefit for the extra $483/month that you will be collecting with the single life benefit? Probably not.
But the amount that is needed to buy a SPIA providing $4,813/month will decline as you both get older.
So then you can refine it by saying that the SPIA to provide $4,813/month will only cost $731k when she is 70 and would only cost $527k when she is 80... so you could use a ladder of a 30 year policy for $527k, a 20 year term life policy for $204k and a 10 year life term policy for $155k... can you buy that package of policies for $483/mo (or less)? Perhaps.
When I went through it it seemed that at best it might be close but it would be unnecessarily complicated compared to the 100% joint option. If the using the excess of the single life option over the joint life option to buy life insurance on me to fund the benefit once I pass had been compelling then I probably would have considered it, but it wasn't and that made the decision for us.
Not to mention even if it did have a little benefit explaining the strategy and its complexity to DW to get her buy in to sign off on the single life pension... not worth the trip!