Relying on a pension?

[MarieIG]

I'll keep this in mind. I've learned a lot today. Thanks everyone!

Typically, a spouse must sign off on a waiver of survivor rights.

 

[MarieIG]

Ours couldn’t be made until retirement.

DH's papers can't be put in more than six months prior to retirement. The paperwork states that is by Federal law.

 

[MarieIG]

We chose the option of leaving the whole pension to each other. I took a 300/month hit because he is 5 years younger and he took a 150/month hit. When one of us dies the one alive gets his or hers restored to the full amount.

DH has a pension. If I die first, he gets the pop up.

 

[Mulligan]

pensions rock - they make retirement planning easy

nothing like a steady stream of income month after month after month after...

Damn, right. Especially one with a cola, and big enough that you dont even spend all of it each month. It sure papered over a lot of my dumb money wasting mistakes in my more youthful years.

 

[Just_Steve]

pensions rock - they make retirement planning easy

nothing like a steady stream of income month after month after month after...

Indeed.

 

[rk911]

our traditional defined benefit pensions has a death benefit of sorts. we each get 50% of the other’s pension upon death. they both go away after the second death and that’s ok...we won’t be needing them any longer. these are govt pensions...no lump sum option.

we live off our pensions...day-to-day spending. SS accounts for most of our quarterly tax payments. we don’t touch our investments except for major purchases like a new motor home in 2015.

ALL of that was used in my calculations that determined if we could retire early. btw, neither of us had ever heard of the term FIRE or the FIRE CALC until a few months ago. we both retired at 55. we are now 67 and 68.

 

[Chuckanut]

Are these decisions made at the time you draw the pension or before? I don't think my husband ever specified one way or the other.

I made mine decisions at retirement.

But, they can usually be changed if my life circumstances change. For example, if a bewitching woman hooks me into marriage I can turn on a survivor benefit for her. If she divorces me three years later to run off with the pool boy, [-]I can go back to getting 100% with no survivor benefit.[/-] the courts decide how that turns out. However, if she passes away, I can switch back to the non survivor benefit. (Edited to correct divorce and death changes.)

There are limits to the changes. One has to make the change within certain time limits of a qualifying event.

 

[Big_Hitter]

I made mine decisions at retirement.

But, they can usually be changed if my life circumstances change. For example, if a bewitching woman hooks me into marriage I can turn on a survivor benefit for her. OTOH, if she divorces me three years later to run off with the pool boy, I can go back to getting 100% with no survivor benefit.

actually, the election of a form of payment on your annuity starting date is generally irrevocable - however, there are some public sector plans that only look at who you are married to when you die

 

[copyright1997reloaded]

I made mine decisions at retirement.

But, they can usually be changed if my life circumstances change. For example, if a bewitching woman hooks me into marriage I can turn on a survivor benefit for her. OTOH, if she divorces me three years later to run off with the pool boy, I can go back to getting 100% with no survivor benefit.

This would be highly unusual (that they would allow you to change J&S options after you are drawing a pension). In fact, I've never seen one so am very curious as to what you plan is that allows this.

 

[Chuckanut]

actually, the election of a form of payment on your annuity starting date is generally irrevocable - however, there are some public sector plans that only look at who you are married to when you die

I did overstate the east of making changes especially in the case of divorce, but they can be made.

Getting married

If you marry or remarry after retirement, you might be able to change your benefit option from the single-life payment level to provide a survivor benefit to your new spouse.
To qualify, you must request the change between your first and second years of marriage. ....
If you change to a survivor option, your monthly benefit will be reduced. Contact us for a new benefit

Becoming single:

If you chose Option 2, 3 or 4 and your survivor dies before you do, your benefit can be adjusted to Option 1, the single-life payment level.

In a case of a divorce (new or previous) court ordered property benefits take precedent over the plans rules. So, I may or may not be able to make the change.

 

[Big_Hitter]

^ public sector pension?

 

[Teacher Terry]

When I was young I worked in employee benefits for a large steel company. My least favorite part of the job was telling widows that there husband had chosen no survivors benefits. These were usually women 55 and up whose husbands had lied to them. Many had never worked. So the pension died with the husband. People would go into shock, start crying, asking me what they were going to do. At 22 I had no clue. Also some of these ass hats had left their life insurance to someone else.

 

[Chuckanut]

^ public sector pension?

Yes. Teacher's retirement system.

 

[Big_Hitter]

This would be highly unusual (that they would allow you to change J&S options after you are drawing a pension). In fact, I've never seen one so am very curious as to what you plan is that allows this.

public sector pension plan

 

[mistermike40]

Typically, a spouse must sign off on a waiver of survivor rights.

This was our experience with Megacorp. If we chose anything other than 65% survivor benefits, DW would have had to sign off in agreement.

It's only 5% less than a single-life pension would have been... it was the easiest decision we had to to make with regards to retirement.

 

[Teacher Terry]

Chuck, I have a state pension and like you changes can be done for the same reason. Whoever outlives the other will need that second pension so it was a easy decision for us.

 

[copyright1997reloaded]

Yes. Teacher's retirement system.

Thank you. Hm, with my post-retirement teaching gig I too might end up with a small pension from a teacher's retirement system. I will have to look into this in case I decide to go for YAS (yet another spouse).

ETA 2: Yet another thing learned on ER-org that I didn't know and that might someday be useful.

 

[hausfrau]

When I was young I worked in employee benefits for a large steel company. My least favorite part of the job was telling widows that there husband had chosen no survivors benefits. These were usually women 55 and up whose husbands had lied to them. Many had never worked. So the pension died with the husband. People would go into shock, start crying, asking me what they were going to do. At 22 I had no clue. Also some of these ass hats had left their life insurance to someone else.

That's really sad. It sounds like there are protections in place now?

 

[Big_Hitter]

That's really sad. It sounds like there are protections in place now?

since around 1984 - REA - Retirement Equity Act of 1984

 

[Teacher Terry]

Yes thankfully there are protections now. This was in the 70’s.

 

[Big_Hitter]

Yes thankfully there are protections now. This was in the 70’s.

interestingly enough, there are not similar protections on benefit payments for defined contribution plans - in other words, I can take out my 401k money, on my own, and spend it however I want without any spousal consent whatsoever. I do believe, however, the spouse must consent for the participant to name a beneficiary other than his/her spouse in a 401k plan.

 

[Offgrid Organic Farmer]

I couldn't find a thread on this, so here goes. I am 12 years younger than DH. All of our retirement planning is based on my age (I'm 47). He is eligible for a modest pension in 6 years from a prior job that will give us about 20K a year. I have never counted this pension in our retirement planning because it does not have a death benefit.

I have a military pension that gives us around $19k a year.
Though after I retired, my wife continued working another 10 years. Now she gets her own federal pension of around $3k a year.

We still have a number of years to go before either of us is eligible for SS.

You will be fine.

 

[RunningBum]

Sort of...except there was quite a bit of work and a LOT of gnashing of teeth for 22 years to "win" that lottery. Ed McMahon sure as hell didn't show up and say, "YOU WON!!!"

That's the truth!

Besides, even taking a job with a pension was no guarantee. Had I stayed with the pension job, I would've been switched over to a cash-balance plan. And I'd probably still be working, rather than 8 years retired.

 

[MarieIG]

When I was young I worked in employee benefits for a large steel company. My least favorite part of the job was telling widows that there husband had chosen no survivors benefits. These were usually women 55 and up whose husbands had lied to them. Many had never worked. So the pension died with the husband. People would go into shock, start crying, asking me what they were going to do. At 22 I had no clue. Also some of these ass hats had left their life insurance to someone else.

That is horrible.

In my opinion, each spouse should take the other into consideration when planning their respective retirements.

Even on this Board, while some spouses are very cognizant of the survivor's needs, with others, it's all about what works for them - with seemingly no thought whatsoever as to how their spouse would manage if they died first.

 

[Teacher Terry]

My dad was pretty sick with a chronic condition in his mid 50’s. He had a lawyer give everything’s to my mom by putting everything in her name only. The lawyer advised agaisnt it saying my mom could divorce him and keep everything. He said that sweet woman is going to have to take care of me and I want things as easy as possible. He also made sure to take the survivor option for my mom. Back then it was before the law because it was the 70’s. My mom in turn set up a life estate for him so he could living in the house with daily care twice a day. We lived next door so I could have kept a eye on him. My mom ended up caring for him for 14 years.