Pension Plan Retirement Options

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Choosing between pension options can be a difficult task. Choosing an option that guarantees your spouse pension benefits after your death means extra security but also lower monthly benefits. On the other hand, choosing a pension option that only pays through your lifetime can provide larger monthly payments, but requires a lump sum to protect your spouse if she outlives you. Use this calculator to help decide which pension option works best for your particular retirement needs.

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Pension Plan Retirement Options

Pension Plan Retirement Options
Choosing a Joint Survivor Benefit costs you JOINT_PENSION_COST_MONTH per month.The cost of the Joint Survivor Benefit option is the difference between the pension payment for the single annuitant and the pension payment for the Joint Survivor benefit. In your case, this cost is JOINT_PENSION_COST_MONTH. You may be able to apply this cost to a life insurance plan that can provide similar financial resources to your spouse instead of choosing the Joint Survivor Benefits.
At age AGE_OF_DEATH, which was your estimated life expectancy, you would require INSURANCE_REQUIRED earning RATE_OF_RETURN per year to replace your pension benefits. This would provide JOINT_PENSION_AT_RETIREMENT per month in today's dollars to your spouse through age SPOUSE_DEATH. If you died during your first year of retirement at age RETIREMENT_AGE, you would need INSURANCE_ATRETIRE_REQUIRED earning RATE_OF_RETURN per year to replace your survivor benefit.

Results Summary
Your current age CURRENT_AGE
Your spouse's age SPOUSE_AGE
Your age at retirement RETIREMENT_AGE
Your spouse's age at retirement SPOUSE_RETIREMENT_AGE
Your life expectancy AGE_OF_DEATH
Your spouse's life expectancy SPOUSE_DEATH Single pension at retirement SINGLE_PENSION_AT_RETIREMENT per month
Joint pension at retirement JOINT_PENSION_AT_RETIREMENT per month
Indexed for COLA INFLATION_RATE INDEXED_FOR_INFLATION
Joint Survivor Pension Cost JOINT_PENSION_COST_MONTH per month
Lump sum required if you die during your first year of retirement INSURANCE_ATRETIRE_REQUIREDThe cost of life insurance for this amount is estimated at INSURANCE_ATRETIRE_COST per month (INSURANCE_COST_PER_THOUSAND per $1,000 per year)
Lump sum required if you die at age AGE_OF_DEATH INSURANCE_REQUIRED The cost of life insurance for this amount is estimated at INSURANCE_COST per month (INSURANCE_COST_PER_THOUSAND per $1,000 per year)
Future value of savings FUTURE_VALUE_SAVINGS based on a annual rate of return of RATE_OF_RETURN
Break even age You must live to age BREAK_EVEN_YEAR

Retirement requirements by age of spouse at your death

**REPEATING GROUP**

Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We can not and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

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Definitions

Current age

Your current age.

Retirement age

Age you are going to retire and begin receiving your pension benefits.

Your life expectancy

Your estimated age of death. This is the age at which Single Annuitant Pension benefits would end.

Spouse age

The current age of your spouse.

Spouse's life expectancy

The estimated age of your spouse's death. This is the age they will no longer require benefits.

Single pension at retirement

The monthly pension payment you will receive if you choose a single annuitant pension.

Joint pension at retirement

The monthly pension payment you will receive if you choose a joint survivorship pension.

Insurance cost per thousand

Your estimated cost of life insurance per thousand dollars of coverage per year. Please note that this is only an estimate, your actual costs can vary considerably depending on your health, sex and age. This calculator assumes that your life insurance has no cash value.

Indexed for COLA

If your pension is indexed for a Cost of Living Adjustment, check this box.

Rate of return on investments

This is the annually compounded rate of return you expect from your investments. The actual rate of return is largely dependant on the type of investments you select. From January 1970 to December 2006, the average compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 11.5% per year (source: www.standardandpoors.com). During this period, the highest 12-month return was 61%, and the lowest was -39%. Savings accounts at a bank pay as little as 1% or less.It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect additional sales charges and fees that funds may charge. For the purposes of this calculator, taxation is not factored into the results. If you pay taxes on the interest, dividends or capital gains from these investments, you may wish to enter your after tax rate of return.

Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We can not and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.