How to maximize your pension benefits. Pension maximization is an effective strategy for married individuals who are current participants in a pension plan. It helps them receive their maximum retirement benefit and guarantees their surviving spouse an income after their death.
To understand how pension maximization could impact your retirement, consider this example:
You choose to receive $4,000 per month in your retirement and ensure that your spouse receives the same. Choosing this option would give you $1,000 less per month for your entire retirement - $12,000 less per year or $120,000 lost for every 10 years in retirement. Because people continue to live longer, you could live 30 years in retirement, costing you $360,000 if you fail to plan your pension properly.
Selecting the life only option ($5,000 per month - the maximum available) for your monthly pension income may ensure you receive the highest amount available. You may use the extra income to purchase a life insurance policy so your spouse will be protected and receive tax-free income from the proceeds upon your death. If your spouse predeceases you, you continue to receive the highest monthly benefit and have the option to reassign your beneficiaries or cancel your life insurance.
In either situation, both spouses are protected and can maximize the income provided by the pension. With pension maximization, you receive the maximum income from your pension and also help make sure your family is taken care of.
One of the most important decisions you will face when you leave your job is deciding which pension option to choose. By making the right choice, you can maximize your income and preserve your surviving family’s financial security in the event of an unexpected death. Remember, the pension choice you make is IRREVOCABLE. Contact a Beacon Financial representative today to explore your options.
*Example used as illustration only, not indicative of any particular situation, actual results will vary. Guarantees are based on the claims-paying ability of the issuer.
This information is general in nature and should not be relied upon for financial decision. As with any financial matters, please consult with your financial professional before taking any action.