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Pension Maximization

Depending on your pension plan, you may have three options for selecting your monthly income amount.

  • Single life gives you the maximum monthly income amount, but your spouse will not receive any income after your death.
  • Joint and last survivor gives you a reduced monthly income amount that your spouse will continue to receive after your death.
  • Joint and 50% survivor gives you a reduced monthly income that is greater than the amount you would receive with joint and last survivor, but your spouse will receive only 50% of that amount after your death.
  • Pension maximization gives you another choice. You elect the highest payout to you without giving up survivorship benefits.

Under pension maximization, you select the single life option. You use a portion of that income to purchase life insurance, naming your spouse as your beneficiary. When you die, the cash from the policy may help replace the income normally provided by your pension. An added benefit to this option is that you can change the name of your beneficiary should your spouse die before you.

A financial services professional can help you decide whether pension maximization is right for you.