By Stewart Koesten

If you or your spouse is eligible for a pension benefit, you must choose how to receive that money. Weighing the pros and cons of both options can leave the married retiree in a bit of a pickle, hence the “pension dilemma.”  The two most common benefit options are:

  1. Single life option – offers the retiree the higher retirement benefit, but income stops upon the retiree’s death.
  2. Joint and survivor income option – provides a lower benefit that lasts for the life of the retiree and his or her spouse. Given the pros and cons of both options, the married retiree is in a bit of a predicament, which is often referred to as the “pension dilemma.”

As you carefully review these options, keep in mind that there may be an actual “third” income option.

  1. Pension maximization option – this third option, which may or may not be appropriate for everyone, is really a combination of the single life option and life insurance. By taking the higher benefit and using some of it to pay the premiums on a life insurance policy, you may be able to “net” more than you would with the joint and survivorship option. If you pass away first, the policy’s death benefit can provide your surviving spouse with a source of income to replace your discontinued pension benefit. If your spouse dies first, you may either surrender your policy for its cash value or change the designated beneficiary to another heir. (Note: The success of this strategy may depend on your age, your health, the type of insurance policy, and the schedule of premium payments.) Before proceeding, it is important that you consult with your trusted financial professional.

For help making sense of your options,

schedule a meeting by clicking below, contact Stewart Koesten –, or call (913) 345-1881.