Ask Terry Questions Spousal Annuity from Deceased Husband’s Pension

Spousal Annuity from Deceased Husband’s Pension

By Terry Savage on November 29, 2023 | Financial Planning / Retirement

Good morning, Terry. I’m hoping you can give me guidance on what options to select for a spousal annuity from my deceased husband’s pension fund. I’m 58 years old will be 60 in June 2025 and in very good health. I’m very disciplined when it comes to saving and investing. I’m currently able to manage my monthly expenses on my current income and plan on working until age 66. The benefit fund is IMRF. They have offered 2 options effective Nov 1, 2023.
Option 1: Receive $138.84 per month, with annual increase of $4.17 plus a 13th check paid in July each year. This is payable for life even if I remarry.
Option 2: Receive $954.23, annual increase $28.63 plus an 13th check paid in July each year until age 60. At age 60, I will no longer receive pension. This is payable until age 60 even if I remarry.

If I live for another 20 years, Option 1 is better. A friend suggested Option 2 and investing it to realize a larger gain in less than 20 years. I don’t want to allocate this money to the stock market. Can you make a suggestion or give me some guidance, please?

Thank you so much!

Terry Says

Whew, this is part of a much larger financial picture — revolving around your own future plans and income needs. And issues like whether you should own some sort of long term care insurance. Did they also give you a lump sum option — that might be rolled into some other type of investment?

There is more complexity than either/or to making this decision.
Can I direct you to an expert at evaluating these alternatives in the context of your entire financial plan? REad this:

This will connect you with a carefully vetted, FEE-ONLY, FIDUCIARY financial advisor who will not be trying to sell you something! Please write back and let me know what decision you made!

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