Survivor Options (Projected Costs & Benefits).
Action Step: Pension Protection (Richard Sample).
Richard's pension will provide a vital part of your retirement income and must be PROTECTED. Although the Survivor Option is not elected until Richard retires, planning for the cost should begin NOW. Option 3w (highlighted) has a projected cost of $230.44 per MONTH - fully 3.50% of Richard's pension.
Survivor Options (Cost Comparison Over 30 Years).
Although not immediately apparent, Survivor Option costs INCREASE. This is because your annual Cost-of-Living Adjustments (COLAs) are based on the pension you actually RECEIVE – and not on your original “Unmodified” allowance. Consequently, the more a Survivor Option reduces your pension, the more that option also reduces your COLAs – and the compounding effect can become substantial over time.