Expert: Ed McFarland - 7/22/2004

Question
I have received an estimate of $3,080.80 per month in a straight life annuity, payments for my lifetime only, benefits payable at 65.  Is there a way I can estimate the monthly amount I would receive if I elected to take benefits with my wife having survivor benefits?  I am 61 and she is 62.  My company pension contact is on vacation.  

Answer
When you received your estimate of pension benefits, you should have gotten a couple of choices for survivoring spouses.

USual choices include full survivorship, that is a full pament until you both leave this world and probably half and two-thirds benefits. There is no easy way to estimate this because of the variables in the plan itself. However once you do learn the amounts, go to the internet and search for "pension maximization". Pension Max is the calculation of the the top benefit and the cost of buying an income substitute, often life insurance, that will replace the income after you die.

Often maxing the pension and buying the replacement is a better deal than survivorship options. But get the numbers first.

Good luck.