Pensions and Defined Benefit Plans

If my spouse dies, will I still get his/her pension?

Maybe. It depends on whether your spouse chose a monthly payout based solely on his/her life expectancy, or a monthly payout that continues through your life – that is, the “joint and survivor” benefit option. If you aren’t sure what your spouse chose, get in touch with the company providing the pension.

As you might expect, with the “joint and survivor” option, the size of the monthly payout is smaller because the chances that one of you will live a long time are greater. Additionally, many plans offer different payout options: you may choose a setup that pays 100% to the surviving spouse, 75%, 50%, etc. The higher the promised payout to the surviving spouse, the lower the monthly payment will be.

Once the payout decision is made, it typically can’t be changed. So if your spouse hasn’t retired yet, your best bet is usually to make sure he or she chooses “joint and survivor” – or you may be in serious financial jeopardy if your spouse dies before you do. Alternatively, choose the bigger payment pegged to the retiree’s lifespan, and invest the difference to build a bigger nest egg for you. If your spouse dies shortly after retiring, however, you’re out of luck.

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