I realize now that I should have referred to the Standard Annuity with no beneficiary as Option 1, to eliminate any confusion. When you refer to Option 1, are you referring to the Standard Annuity with the highest monthly payout, but with no beneficiary payments, or the one I called Option 1, which has the lowest initial monthly payment, but would end up having the highest beneficiary payment due to no reduction?
On those tradeoffs ($117 pcm ?) I would undoubtedly opt for Option 1. If not indexed in any way, then it's better to start with a higher amount, as inflation will reduce the value (roughly halfing every 24 years at 3% inflation, but we have seen in recent times inflation can be a lot higher).
Comment that usually one makes this choice only near point of retirement is true. Is this not the case for you?
There is no COLA on the pension, at least one that can be relied on. I believe one was recently added, but it was a one time deal. Any future adjustments would be a bonus, but not expected.
I am semi-retired now and my wife will retire between 2030 and 2032. We started digging deep into the pension options to see how much we could expect on a monthly basis. Did the same for social security (hers and mine). This was all in an effort to see how much would need to come out of our investment portfolio on a monthly basis to support the monthly retirement budget. Since the monthly pension payments vary slightly based on the option chosen, I was hoping one option would jump out as making the most sense for us, but like most things in the financial world, "it depends".
For the big picture, her Social Security will be between $1000-1800, depending on when she claims between 62 and 70. My Social Security will be between $1950-3400 depending on when I claim. For her pension, if we choose Option 1-Joint and Survivor Annuity with no payment reduction for the beneficiary, that would be between 3070 and 3743, depending on when she retires between 2030 and 2032. The rest of retirement would be funded from investments that currently sit at $2.0M (70/30 split with 20 of the 70 being Intl.). Annual expenses are in the $75-80k range.
Statistics: Posted by Shippin'Up — Mon Jan 26, 2026 11:53 am — Replies 17 — Views 987