Pension Options thoughts / suggestions
DW who I from now on will call my Sugar Mama (SM) 59yrs is retiring at end of year. DH who from now on will call Lucky Ducky (LD) 60 yrs. SM has wonderful pension options and we'd like some second opinions on these options.
Basic - 8700/month at SM death, LD gets one month’s allowance – No
Following two are single life annuities
Option 1 - 8261/month at SM death, LD gets present value at start 1,654,000 with monthly decline of 8261 - so about 16.5 years when LD would get nothing – a possible
Option 4 - 8618/month at SM death, LD gets employee contributions value at start 310,903 with monthly decline of 1552 - so about 16.5 years when LD would get nothing – thinking no
Following four are dual life annuities
Option 2 100% survivor - 7561/month at SM death, LD gets 7561/month –?
Option 3 50% survivor - 8091/month at SM death, LD gets 4045/month - a possible
Option 5 100% survivor with popup - 7360/month at SM death, LD gets 7360, if LD dies before SM then pension pops up to basic 8700 - a possible
Option 6 - 50% survivor with popup - 7974/month at SM death, LD gets 3987, if LD dies before SM then pension pops up to basic 8700 - a better possible
Basis of our other funds:
Paid house, cars, monthly CC paid of – NO DEBT
SM IRA – 586,000 AA of 75% Fixed and 25% NW 2025 Life Fund – We will move all this to FIDO when SM retires.
LD IRA’s – 684,700 FIDO Rollover AA of 53% Domestic, 16% International and 31% bonds and 663,666 TSP AA of 30 % G, 31% C, 21% S and 18% I.
I will retire Dec 2020 at 62 from Federal Gov , will be about 2400/month
LD SS 1863/2720/3381 and SM SS 1890/2777/3499
LD does not need the extra 1.6M , heaven forbid SM passed after one month and I’m sure she will live will past 77, we are both healthy ,but parents are just so so for long life’s, So you never know. I am thinking the option Option 6 - 50% survivor with popup - 7974/month at SM death, LD gets 3987, if LD dies before SM then pension pops up to basic 8700 – would be the best for us. Only about 300 less then option 1 with the 1.6M. And i like that SM can pop back to 8700 when LD dies first.
Thanks for looking and adding any helpful thoughts