I will be retiring in June and my pension plan asks me to choose how much I will be paid and how much pension my wife will get when I die. We are having a tough time on criteria to figure out which to choose.
The first option would be full pension. But it would mean that if I die she would have to draw from savings to make up the difference of $800 a month. She could do this.
The last option would deduct the $800 from pension check but she would get that $800 added to her when I die each month.
It seems like a crap shoot which is dangerous when you can't change it once you decide. Do you have advice how to help make which I take.
Sounds like you would be a good candidate for what we call "Pension Maximization". This is when the difference between the "full" pension and the lower survivor benefit is substantial enough to where purchasing a life insurance policy on you to cover the difference would make sense. There are many advantages to this, namely, you have more money to live on and your wife will too should you pass. If your wife were to pass before you, you could drop the policy and you would still be getting the higher amount. Because the proceeds from a life policy are tax free, your wife could annuitize the benefit to produce the desired income. Since the annuity payments would be largely non-taxable, she may not need as much or you may want to increase her income.
Doing it this way gives you and her much more control over the situation.
I hope this helps, if you would like more information, let me know.