Our Favorite Pension Plan Beneficiary Option Reminder – Survivor Option Review

For those that still have a pension plan, congratulations, you are lucky!

With longer living (thank goodness) becoming more frequent, many pensions are being withdrawn from the market, replaced by the fancy termed Defined Contribution Plan aka 401k –

If you have a Pension plan, at the time of commencement, you have an irrevocable choice to make – Make it carefully.

Our Favorite Pension Plan Commencement Distribution Option

This is by no means a cart blanch recommendation for EVERYONE to make this decision, however many may be best suited by one of our favorite options –

100% Joint Survivor-

We like this option for the following reasons:

  1. No change in cash flow for any parties not matter the mortality of each
  2. Statistically this is the may be the best option for getting the most money as this will pay until both participants are deceased
  3. Easy to understand – You get a monthly deposit that stays constant

Words of Caution

  • Do not take this decision lightly as it will be irrevocable
  • Careful on taking your pension as a lump sum, this may not always be the best decision
  • Keep your beneficiary paperwork safe – with mergers and changing of plans, you want to have proof of your decision in the future if ever called upon
  • Frequently we see a ton of options – don’t bite on a bad one – there are many that are better for the company than the participant, not surprisingly
  • If you are single, it may make sense to take your pension earlier – Only one beneficiary makes this decision more complicated and this is also the case for Social Security (our most famous public pension plan!)

This post is just a reminder as we have run into this a few times more frequently recently and wanted to get the word out there once again!

Reach out with ANY questions!

Have a Great “Pension Benefit Reminder” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

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