Electing the Wrong Pension Survivorship Option Because It “Pays More Today”

Many retirees choose the single-life pension option because the monthly amount is higher. But the higher payment comes with a hidden cost: your spouse receives nothing once you pass away.

Short-Term Gain, Long-Term Pain

The temptation to take the biggest check now is strong. But if you’re the higher-earning spouse or have longevity risk, this choice can leave your partner with a major income drop at the worst possible time.

Understand the Trade-Off

Survivorship options—e.g., 50%, 75%, or 100% continuation—reduce your monthly benefit to pay for future protection. Instead of seeing the reduced check as a loss, think of it like an insurance premium.

Key Questions

Before choosing, evaluate:

• Does the spouse rely on your income?

• Do you have enough life insurance to replace lost pension payments?

• What’s your health outlook compared to your spouse?

• What other guaranteed income sources exist?

Choosing by “who gets the bigger check” is flawed. Choosing based on lifetime household income is smart.