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This article will help you better understand your pension payout options. This is important because as soon as you choose your payout option it can’t be changed. Should you take the annuity or the lump sum?
Pension Payout Options
There are three main pension payout options you need to know. When you receive a pension, you need to decide how you would like to receive your pension payments. The payment plans can be broken down in a few different ways but for the most part you’ll be able to choose among the following options:
Single life pension: Choosing a single life pension option means the employer will pay the worker’s pension until his or her death. This payment option offers the highest income payment per month but pays out no benefits to a spouse or beneficiary who outlives the retiree.
Pension Payout Options
Partial spousal benefit: Choosing the partial spousal benefit means the retiree will receive a lower monthly payment during his or her lifetime. The payment will be lower than the than the monthly payment offered by the single life pension. When the retiree dies the surviving spouse continues to receive a defined percentage of the monthly pension payment.
100% spousal benefit: Choosing the 100% spousal benefit means the retiree will receive an even lower monthly payment than both of the options above. However, by selecting this option when the retiree dies the surviving spouse will receive 100% of the monthly retirement income benefit for his or her entire lifetime.
Pension Payout Options
The best option for you depends primarily on whether you’re married or single. If you are married do you anticipate outliving your spouse? Do you even like your spouse? Just kidding…
Check out Know Your Pension for some great free information about pensions. Think this stuff through when coming up with a retirement plan. Many retirees have made the mistake of not making the correct money decision for them.
Ask yourself these types of questions and as always do your own research when considering your pension payout options. I wish you the best of luck!
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May 19th, 2010 at 9:18 am
Hello Jim,
That was a lot of writing! Thanks for reading and posting. I suspect you are referring to Textron Systems? I would suggest the spouse visit with Textron Systems Retirees, Association Inc. I would make sure she knew the exact retirement date then gather up all the information she can find or think of and write it down. Then, make contact with them. I am positive they will have real-life models to compare with or at least lead her in the right direction.
Their website: Textron Systems Retirees, Association Inc
There is information for Surviving Spouses as well as other resources for you all to check out.
Plus: this is their contact page. They also have a luncheon coming up on 21May2010.
Best of Luck!
Jan Petreczko