Retire804.com can help you understand your pension options. We will give you a quick introduction to three pension types, how they differ in your monthly take-home, and how each will affect your spouse if you were to pass. Again, the numbers will be estimates, as exact values will differ based on a variety of factors. Visit Retire804.com and print out our pension estimate letter, which can be sent to Atlanta to receive an official pension estimate in writing. This article illustrates values based on a member being fully vested in the plan and reaching full retirement age, as defined by the plan. Full retirement age is reached with 25 years of service with 55 years of age, or 30 years of service regardless of age. Only full time employment counts toward this credit. Part-time years are credited to a different pension system.
Ten-Year Guarantee
The “max plan” or commonly referred to as the 10 year guarantee, will provide the maximum benefit to the member, currently $4,000 a month. This is a pre-tax value, and will be paid to the member during his or her lifetime. This option offers a 10 year guarantee in the event the member passes within the first 10 years of retirement. In a case where a member passes away within ten years of retirement, a named beneficiary will continue to receive $4,000 monthly payments until the 10 year anniversary is reached. For example, if a member chooses this option and passes in year 2, a named beneficiary will continue to receive payments for an additional 8 years. In the member chooses this option and passes in year 11, then the $4,000 monthly income will stop because it is beyond the guaranteed period of 10 years or 120 months.
50% Spousal Options
When deterimining the spousal options, the ages of both spouses are used to calculate the benefit. Since the 50% spousal option is now ensuring two lives, the benefit will be less than the maxium benefit offered. However, in the event the member predeceases their spouse, the spouse will then contine to receive monthly income for the rest of their lives.
For a member and spouse of similar age, the 50% spousal option may provde the member with an approximate monthly pension income of $3,700, pre-tax. If the member predeceases the spouse, then the spouse would be entilted to 50% of the pension or $1,850 a month, pre-tax.
75% Spousal Option
For a member and spouse of similar age, the 75% spousal option may provde the member with an approximate monthly pension income of $3,200, pre-tax. If the member predeceases the spouse, then the spouse would be entilted to 75% of the pension or $2,400 a month, pre-tax. Notice that the member’s penison income is reduced (compared to the 50% spousal option), but the the beneficiary’s pension is increased.
The above is an example for illustration purposes only. To get your exact amount, please print out the pension estimate letter, complete the form and mail to us or directly to Atlanta. Also, with the spousal option(s), there is no 10 year guarantee. If the member passes in year 1 or year 20, the surving spouse will be entitled to 50% or 75% of the pension benefit.
These numbers are all subject to change, based on you and your spouse’s age. If you are preparing for retirement or if you want to make sure everything is going as planned, print out our pension estimate letter available on Retire804.com and stop by for a visit. Happy retirement, we hope we see you soon!