pension and joint survivor question

[finnski1]

My wife will be 65 in Nov.
She can then receive her max pension. It is a modest one but we have been waiting nonetheless to collect it rather than the reduced values over the past few years.
She just requested the official paper work yesterday and the HR dept said it would probably be a month before we receive it.
The only thing I know at this point is her monthly benefit which I am sure is if she were to take it as a single annuity.
Trying to do some planning/estimating.


Does any one have a good feel for what percentage the joint survivor benefits would be of her max?
basically interested in the standard options:

100% joint and survivor
75%
50%
I also don't know if they will offer a lump sum. Don't like waiting a month.
I will be close to 62 at that point.

 

[Out-to-Lunch]

My wife will be 65 in Nov.
She can then receive her max pension. It is a modest one but we have been waiting nonetheless to collect it rather than the reduced values over the past few years.
She just requested the official paper work yesterday and the HR dept said it would probably be a month before we receive it.
The only thing I know at this point is her monthly benefit which I am sure is if she were to take it as a single annuity.
Trying to do some planning/estimating.


Does any one have a good feel for what percentage the joint survivor benefits would be of her max?
basically interested in the standard options:

100% joint and survivor
75%
50%
I also don't know if they will offer a lump sum. Don't like waiting a month.
I will be close to 62 at that point.

I don't know if this qualifies as "a good feeling" for the decrease, but on my (state) pension, at those ages you would take:

a 15% haircut for 100% survivorship
a 12% haircut for 75% survivorshiop.

(Sorry, we don't have a 50% option.)

 

[jazz4cash]

It can vary quite a bit I think. Sometimes the survivor options are subsidized by employer. In my case the 65% survivor option was available for a cost of 5% of the single life payment. The other options were much more expensive. You could check someplace like immediateannuities.com to get an idea of cost for various options on the open market and related lump sum amounts since you know the single life payout.

 

[Letj]

With my last company, I was able to go on the website of the pension administrator and model any number of options based on age, service and joint survivorship and this model told me exactly what to expect for each option. For joint survivor you can choose 100%, 75% or 50%. I chose 100% because the difference among the 3 options was minuscule.

 

[finnski1]

It can vary quite a bit I think. Sometimes the survivor options are subsidized by employer. In my case the 65% survivor option was available for a cost of 5% of the single life payment. The other options were much more expensive. You could check someplace like immediateannuities.com to get an idea of cost for various options on the open market and related lump sum amounts since you know the single life payout.

Yeah I went on immediate annuities and got a joint survivor one but it doesn't say whether it is 100% , 75 % etc. I assume it is for the 100%.
If so it came out to about 85.6%

 

[finnski1]

With my last company, I was able to go on the website of the pension administrator and model any number of options based on age, service and joint survivorship and this model told me exactly what to expect for each option. For joint survivor you can choose 100%, 75% or 50%. I chose 100% because the difference among the 3 options was minuscule.

Thanks. I will see if they have such a feature.

 

[target2019]

I think your answer may be very different, but here are actual numbers from someone who retired last year.

• Single life, $1,741 (100.0%)
• Lifetime with 10 certain, $1,620 (93.0%)
• 50% Joint & Survivor, $1,560 (89.6%)
• 75% Joint & Survivor
• 100% Joint & Survivor, $1,414, (81.2%)

 

[Red Badger]

With my last company, I was able to go on the website of the pension administrator and model any number of options based on age, service and joint survivorship and this model told me exactly what to expect for each option. For joint survivor you can choose 100%, 75% or 50%. I chose 100% because the difference among the 3 options was minuscule.

+1.

I also had a modeling tool. Chose 100% survivor for the same reason.

 

[Sue J]

When DH retired we chose the 100% to survivor and the payment was reduced by 11.05% to 88.95% of the single life benefit. I thought the reduction would have been a lot more so this looked like a very good deal.

He also had option for 75% and 50% to survivor, I don't remember how much difference there was for those options.

I think this calculation was based on our ages at the time, we were both 55.

 

[finnski1]

When DH retired we chose the 100% to survivor and the payment was reduced by 11.05% to 88.95% of the single life benefit. I thought the reduction would have been a lot more so this looked like a very good deal.

He also had option for 75% and 50% to survivor, I don't remember how much difference there was for those options.

I think this calculation was based on our ages at the time, we were both 55.

that's pretty good.
i think ours will be less because my wife is 3.5 years older than me and she is the pension holder.
Thanks

 

[RetireAge50]

My wife was a school teacher. Her numbers:
100% Single Life
93% Joint at 50%
90.8% Joint at 66.67%
86.8% Joint at 100%

She is a year younger than me. We haven’t decided which one yet. Leaning to no haircut Single Life option. I want maximum security for her and we have other assets.

 

[finnski1]

My wife was a school teacher. Her numbers:
100% Single Life
93% Joint at 50%
90.8% Joint at 66.67%
86.8% Joint at 100%

She is a year younger than me. We haven’t decided which one yet. Leaning to no haircut Single Life option. I want maximum security for her and we have other assets.

Yeah, I have thought about that as I do all the finances, she has no interest and if I die before her I would want her to have a little extra.
I would be fine on my own without any of her pension, with our assets and lifestyle and my ss etc


However we are not talking about much of a pension (they froze it in 2007 so she lost 10 years of service in the calculations) in our case and so we would probably be better off to take the 14-15% haircut and go with joint at 100%.
Also waiting to see if there are any lump sum options.

 

[Telly]

Yeah, I have thought about that as I do all the finances, she has no interest and if I die before her I would want her to have a little extra.
I would be fine on my own without any of her pension, with our assets and lifestyle and my ss etc

However we are not talking about much of a pension (they froze it in 2007 so she lost 10 years of service in the calculations) in our case and so we would probably be better off to take the 14-15% haircut and go with joint at 100%.
Also waiting to see if there are any lump sum options.

If it's not much of a pension, wouldn't she want to take it as all hers, no survivorship to you, to maximize what she'd get out of it?

I was faced with a similar decision when I turned 55. I had a little pension (4 figures annually) sitting on the books from long ago. The first I could take it was at age 55. I could get 3% more for each year I waited to start it, up to age 60, after 60 no more added. I took it at age 55, as the 3% more per year of waiting about matched the inflation rate, so gimme the money now (then). Any right of survivorship options just reduced the amount, of course. As it was, like for most people, a fixed pension, inflation will eat it away over time, so I wanted to maximize what I would get from it up front, so I went with no survivorship. DW filled out the paperwork they sent me saying that she understood that there were survivorship options offered, and that she agreed with my turning them down. Quite a few years later, I do not regret my decision!

I've passed SS FRA, and am continuing to hold off starting my SS till age 70, I think that buys DW a heck of a lot more security than diddling around with a small fixed pension loaded down with a survivor benefit, while inflation eats it away. Those were my thoughts, FWIW.

 

[pb4uski]

My wife will be 65 in Nov.
She can then receive her max pension. It is a modest one but we have been waiting nonetheless to collect it rather than the reduced values over the past few years.
She just requested the official paper work yesterday and the HR dept said it would probably be a month before we receive it.
The only thing I know at this point is her monthly benefit which I am sure is if she were to take it as a single annuity.
Trying to do some planning/estimating.


Does any one have a good feel for what percentage the joint survivor benefits would be of her max?
basically interested in the standard options:

100% joint and survivor
75%
50%
I also don't know if they will offer a lump sum. Don't like waiting a month.
I will be close to 62 at that point.

Here were our numbers at age 65 (but DW is same age rather than 3 years younger):
.......................................... Ee.......Survivor
Single life.......................... 100%......0%
Joint and full...................... 87%....87%
Joint and 2/3 (no 75%)....... 96%....64%
Joint and 50%.................... 101%...51%

We ended up chosing Joint and full with 10 years guaranteed, which was only $5/month less than Joint and full.

 

[finnski1]

If it's not much of a pension, wouldn't she want to take it as all hers, no survivorship to you, to maximize what she'd get out of it?

I was faced with a similar decision when I turned 55. I had a little pension (4 figures annually) sitting on the books from long ago. The first I could take it was at age 55. I could get 3% more for each year I waited to start it, up to age 60, after 60 no more added. I took it at age 55, as the 3% more per year of waiting about matched the inflation rate, so gimme the money now (then). Any right of survivorship options just reduced the amount, of course. As it was, like for most people, a fixed pension, inflation will eat it away over time, so I wanted to maximize what I would get from it up front, so I went with no survivorship. DW filled out the paperwork they sent me saying that she understood that there were survivorship options offered, and that she agreed with my turning them down. Quite a few years later, I do not regret my decision!

I've passed SS FRA, and am continuing to hold off starting my SS till age 70, I think that buys DW a heck of a lot more security than diddling around with a small fixed pension loaded down with a survivor benefit, while inflation eats it away. Those were my thoughts, FWIW.

I understand that logic and we have several months to decide.
In her case waiting to 65 increased the payout about 6% per year and we haven't needed the money so we waited.


As far as the joint and survivor options go an approx 15% haircut would not make much difference but should she pass away fairly young I would give up an amount equal to 30% of our typical monthy spending after that if she were to take the single life annuity. Again not a deal breaking amount but If I were the pensioner I would definitely want most left over for her if I died..


I guess that sort of defines the decision I would make right there doesn't it.

 

[target2019]

I understand that logic and we have several months to decide.
In her case waiting to 65 increased the payout about 6% per year and we haven't needed the money so we waited.

As far as the joint and survivor options go an approx 15% haircut would not make much difference but should she pass away fairly young I would give up an amount equal to 30% of our typical monthy spending after that if she were to take the single life annuity. Again not a deal breaking amount but If I were the pensioner I would definitely want most left over for her if I died..

I guess that sort of defines the decision I would make right there doesn't it.

Spouse will take her pension annuity 100% (small possibility of lump sum). Spouse is 3 years younger, parents each lived almost 25 years after 65. It is very likely spouse will outlive me.

I think you've made a good decision. One thing to check is the pension funding level. That would be part of your lump sum decision.

 

[finnski1]

Spouse will take her pension annuity 100% (small possibility of lump sum). Spouse is 3 years younger, parents each lived almost 25 years after 65. It is very likely spouse will outlive me.

I think you've made a good decision. One thing to check is the pension funding level. That would be part of your lump sum decision.

I will look into that

 

[mountainsoft]

My wife will receive a state pension when she retires. They offer 100%, 66%, 50%, and 0% (single life) survivor options. There is a nice calculator on the retirement plan web site where we can enter the retirement date, earnings, and survivor age. Then it shows the monthly payout for the various survivor options.

Originally I thought we might opt for the 50% or 66% option, but the payout difference between options is only about $100/month. We're going to select the 100% survivor plan to ensure that whoever lives the longest continues to receive the full pension benefit.

 

[finnski1]

My wife will receive a state pension when she retires. They offer 100%, 66%, 50%, and 0% (single life) survivor options. There is a nice calculator on the retirement plan web site where we can enter the retirement date, earnings, and survivor age. Then it shows the monthly payout for the various survivor options.

Originally I thought we might opt for the 50% or 66% option, but the payout difference between options is only about $100/month. We're going to select the 100% survivor plan to ensure that whoever lives the longest continues to receive the full pension benefit.

Definitely leaning that way right now ourselves. Have to wait for the info packet in a few weeks to make sure

 

[pacergal]

Our State pension also has a website that will give you estimated payouts with all options.
We chose 100% joint survivor, the differences was not that much overall, and either spouse will get that guaranteed amount for life, with COLA.

OP--I would imagine either the website or Pension fund could lead you to finding the options and numbers.

 

[jollystomper]

For my pension (non-cola) :
- 75% J&S payment was 89% of the 100% payment
- 50% J&S was 92% of the 100% payment

 

[Carlos2]

My pension in California has the following numbers:

Joint - Survivor benefit

100% I get 83% of full pension

75%. I get 87% of full pension

50% I get 92% of full pension

I made my decision at age 55 that I would take the 100% survivor benefit. It was a no brainer for me because my wife will most likely outlive me since there’s a 14 year gap in our ages. Making the decision at age 55 has an advantage in that I received a higher percentage of my pay so in my case 100% joint survivor benefit above that states 83% is really 88% of my full pension. We also have a pop up provision with our pension so that if my wife should die first, I would then receive my full pension.

Everyone should read up and be aware of their pension benefits early on in their career. I talk with my new teachers about this constantly, because decisions they make over the years can have significant impacts on them when they want to retire. Making the survivor election early or not and its advantages or disadvantages can only be considered if you even know that option exists. Many people have no clue until right before they decide they want to retire.

In this case of the OP, it seems it’s best for them to do as they have planned since its small.

 

[jazz4cash]

Here were our numbers at age 65 (but DW is same age rather than 3 years younger):
.......................................... Ee.......Survivor
Single life.......................... 100%......0%
Joint and full...................... 87%....87%
Joint and 2/3 (no 75%)....... 96%....64%
Joint and 50%.................... 101%...51%

We ended up chosing Joint and full with 10 years guaranteed, which was only $5/month less than Joint and full.

OK, I give up! What does the second column of numbers represent? And what is Ee?

 

[Carlos2]

OK, I give up! What does the second column of numbers represent? And what is Ee?

The second column is what the spouse will receive of the full pension when the pensioner dies. So let’s say the full pension is $3000 per month. For example,

100%…0 means the husband gets the whole $3000 each month he’s alive, but when he dies she gets nothing as in $0

87%…87% means the pensioner would receive $2610 while he’s alive and the wife would receive same $2610 when he passes.

 

[finnski1]

I think your answer may be very different, but here are actual numbers from someone who retired last year.

• Single life, $1,741 (100.0%)
• Lifetime with 10 certain, $1,620 (93.0%)
• 50% Joint & Survivor, $1,560 (89.6%)
• 75% Joint & Survivor
• 100% Joint & Survivor, $1,414, (81.2%)

Well the paper work showed up.
No lump sum options.


single 100% 100% survivor 0%

single lifetime with 10 yr certain 93.4% survivor 0%(after 10 yrs)

joint and 50% 91.4% survivor 45.7%

joint and 75% 87.6% survivor 65.7%

joint and 100% 84.1% survivor 84.1%


Leaning towards the joint and 100%. Just makes the most sense for us.


Thanks for all your earlier replies