Which pension option to choose

[Rianne]

This seems like a no brainer for us. I don't get the difference between 75% and 100% Joint Survivor:
50% Joint Survivor DH - $2915.61 Me - $1457
75% Joint Survivor DH - $2763.24 Me - $2072.40
100% Joint Survivor DH - $2625.95 Me - $2625.95


For DH there's only a $137/month difference between 75% and 100%. But for me there's a $554/month difference. The 100% JS looks great to me! Could this be a typo?

 

[mountainsoft]

After reading this discussion, I ran the estimates on my wife's pension again. There is a $320 difference between Single Life Only (where I get nothing if she dies) and 100% survivor (where payments continue till we're both dead).

In theory, we could bank that $320 difference and buy a life insurance policy for her. Unfortunately, she had to get a pacemaker a couple years ago and now the insurance companies want nothing to do with her. Our current employer based insurer even denied us when we tried to increase our existing coverages last year.

Even if we could find an insurer that would accept her, I ran the numbers if she had a 800K policy and died after ten years. It still didn't work out as well as the 100% survivor pension option.

 

[finnski1]

This seems like a no brainer for us. I don't get the difference between 75% and 100% Joint Survivor:
50% Joint Survivor DH - $2915.61 Me - $1457
75% Joint Survivor DH - $2763.24 Me - $2072.40
100% Joint Survivor DH - $2625.95 Me - $2625.95


For DH there's only a $137/month difference between 75% and 100%. But for me there's a $554/month difference. The 100% JS looks great to me! Could this be a typo?

No I don't think that's a typo. But I agree it appears to be a no brainer to take the 100% JS.
We are in the same process and My wifes 100% JS works out to about 84% of her SLA. I am 3.5 years younger so that probably knocked my survivor benefit a little bit. Hers is a mini pension so there is only about $160 difference between the SLA and the 100% Joint so it makes sense for us to do the 100% JS as well.

 

[Ebendana]

I can share that when I had the pension choice, I chose a 15 yr certain/life option, vs a joint and survivor which would have been alot less...at 15 years the payout was 80% of the lump sum option, I qwas 56...If I live to 86 it will pay close to double the lump sum...but, in addition, I am keeping a life insurance policy on my life for my non working spouse, in case I die first so that he can use that payout to replace the income lost after 15 years...is there a certain period option? I did not trust myself with the lump sum due to market ristk

 

[seattledan]

Thanks for your point of view Dave.
I see from your calculations that my wife and I would have collected 1.1 million up to age 95 with the 100% survivor option.
I would collect 1.2 million if I live until 95 with the single life annuity.

Non of us know of course how long we will live. My wife may make 95 but I seriously doubt if I do. But you of course have to plan for the possibility.

I hope I don't die early and end that single life annuity it would be unfortunate.

I have a similar pension and my wife is 8 years younger. I am taking the 100% survivor because we will be financially fine during the years when I'm alive. I chose 100% survivor because I want my wife to have more money per month.

 

[piccolopat]

There are other questions that should be answered before deciding. First, have you separately funded for the future education costs of your kids or is that coming out of your savings? Second, your wife is non-working now but did she ever work? Would she be able to go back to work in her field or take some classes and start something new? Once you retire, you might consider reversing roles so that you take care of the kids and have your wife rejoin the workforce. This way, should anything happen to you before her FRA, she will be able to better support herself and the kids. She's young enough now to build up her own retirement savings and being employed will mean she may have access to health insurance at work which can be a valuable benefit. If this is possible, opting for a lower survivor benefit with a higher benefit today may make sense for your family. Oh, and don't forget to get life insurance on your wife, especially if you take a lower benefit for yourself now.

 

[cnocmmz]

The day has finally come to claim my non-COLA, No lump sum available, megacorp pension.

I'm finding the choice difficult to decide on.

Single life annuity $2,868

50% survivor $2,330 a month beneficiary gets 1,165

66% survivor 2163 a month beneficiary gets 1442

75% survivor 2065 a month beneficiary gets 1548

100% survivor 1800 a month beneficiary gets 1800

I'm turning 60 and my non- working wife 43.
Two children 6 and 9

I'm planning on claiming social security at age 62 1800/month as well as claiming for children under 18 which I think is $800 but very difficult to get accurate information about this amount.

I have a $500,000 life insurance term policy until age 70.5

$2,000,000 securities and cash

Expenses $2000-$4000/mo

Planning to buy a house in 2-4 years in the southeast and expecting to pay $300-$400 K for it. Not sure if I'm going to get a mortgage or pay cash. Looking for some advice on that also.

Maybe my math is a little rusty but depending on investments i.e. how much is on cash, if you drew out 3 percent with your 100% pension and SS you would be fine as long as you have a good budget.

 

[Almost There 2021]

I would start by asking your wife....I am sure she will tell you which option to consider....I am a few years older than you/financially secure and looking for a 43 year old wife. Any sisters or cousins?

Hey I tried......

 

[JeKa]

You don't say how your health is or what your family history is. Is that $1800 SS based on age at 62 or FRA.
That aside, AA somewhere 50/40/10 should avg. long term about 8%.
4% draw on 2M investment is 80K. 4% on 1.6M (minus house) is 64K. 4% on 1.2M is 48K. All above your top end planned expenses.
Based on that, IMHO, take the 100% survivor benefit, delay SS until FRA (which I assume is 67). At that point DW can collect half of what your SS benefits are. When you pass, she will collect hers and half of your SS. Kids will still have a few years to collect if you start at 67.

Oh, And enjoy retirement.