Purron
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Nov 23, 2007
- Messages
- 5,596
Hi all,
My DH will be joining me in early retirement in about 9 months. His pension will represent about 50% of our retirement income until we receive social security in about 8 years. We both qualify for decent social security benefits and plan to start taking them at age 62. Until then, the rest of our retirement income will come from my much smaller pension and income from our investments. I did much more job changing than my DH, so most of my retirement assets are in IRAs and the TSP. I considered purchasing an annuity some time ago with my retirement funds which would approach the value of his pension, but decided it's is best not to turn my hard earned money over to an insurance company.
Here's the question - how much of a spousal benefit makes sense? I'm thinking an 80% benefit would work for us. This would reduce his pension (which does get cola increases) to about 86% of the amount with no spousal benefit at all and provide me with about 69% of the unreduced pension in the event something happens to him. I've run the numbers and these options would provide us with financial security. Even so, I sure don't want us to give up more in pension benefits than necessary. I've heard folks talk about the option of taking no spousal benefits and using a life insurance policy to provide security for the surviving spouse. I haven't checked the rates, but we are not crazy about insurance policies or insurance companies in general and think it might be expensive due to some medical issues and family history.
In any event, I would be interested in hearing how others analyzed this issue and derived the optimum amount of the spousal benefit on a pension.
My DH will be joining me in early retirement in about 9 months. His pension will represent about 50% of our retirement income until we receive social security in about 8 years. We both qualify for decent social security benefits and plan to start taking them at age 62. Until then, the rest of our retirement income will come from my much smaller pension and income from our investments. I did much more job changing than my DH, so most of my retirement assets are in IRAs and the TSP. I considered purchasing an annuity some time ago with my retirement funds which would approach the value of his pension, but decided it's is best not to turn my hard earned money over to an insurance company.
Here's the question - how much of a spousal benefit makes sense? I'm thinking an 80% benefit would work for us. This would reduce his pension (which does get cola increases) to about 86% of the amount with no spousal benefit at all and provide me with about 69% of the unreduced pension in the event something happens to him. I've run the numbers and these options would provide us with financial security. Even so, I sure don't want us to give up more in pension benefits than necessary. I've heard folks talk about the option of taking no spousal benefits and using a life insurance policy to provide security for the surviving spouse. I haven't checked the rates, but we are not crazy about insurance policies or insurance companies in general and think it might be expensive due to some medical issues and family history.
In any event, I would be interested in hearing how others analyzed this issue and derived the optimum amount of the spousal benefit on a pension.