Is There a Solution to the Pension Dilemma?- Season 4: Episode 1

If you happen to be one of those people with a traditional pension plan, there’s one important piece of information you should know about: unless your spouse elects to sign a waiver that allows otherwise, your pension benefits will be paid out to the both of you in the form of what’s called a “qualified joint and survivor annuity.” In other words, you’ll receive a reduced amount during your lifetime, so that your spouse will continue to get at least 50% of that amount if you happen to die first.

But if you both elect instead to receive the higher single-life annuity payment, the payments (while significantly higher) would stop at your death and not continue for the surviving spouse.  This can be something of a dilemma for people who would want the higher payments, but are reluctant to lose that income if the pension owner doesn’t outlive the spouse.

There is a potential solution to this problem, though.  Could you perhaps have both the larger payments AND provide an income for your surviving spouse?  Listen in to the discussion with Johnny Dean and “Professor” Rick Plum, CFP® on this week’s edition of Managing Your Financial Future!