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My husband is 56, I am 42. We were married a year ago for first time. At that same time, my husband elected the "early out" from fed. gov.

He has named me as his survivor for the retirement annuity. In order to pass on the maximum possible from the annuity to me per month, in the event of his death, he will need to receive $220. less per month permanently while he is alive. The montly annuity payment he receives now is not his full retirement since he left early. My maximum survivor benefit would be $1300/mo from his annuity.

Question: is there a smarter way to invest the $220/mo? We just want to investigate before we make paperwork permanent. We have no children. I am self-employed with Keogh. We're beginners here in Fooldom. thanks! Meowiz
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My husband is 56, I am 42. We were married a year ago for first time. At that same time, my husband elected the "early out" from fed. gov.

He has named me as his survivor for the retirement annuity. In order to pass on the maximum possible from the annuity to me per month, in the event of his death, he will need to receive $220. less per month permanently while he is alive. The montly annuity payment he receives now is not his full retirement since he left early. My maximum survivor benefit would be $1300/mo from his annuity.

Question: is there a smarter way to invest the $220/mo? We just want to investigate before we make paperwork permanent. We have no children. I am self-employed with Keogh. We're beginners here in Fooldom. thanks!
Meowiz


You didn't say what his payout options are but it sounds like he is receiving a reduced benefit in order to pass on spousal benefits after he dies. If he were to take the option of receiving maximum benefits now, when he dies you would receive nothing.

If you could get out a crystal ball and predict when he dies, you may come out ahead by investing the additional $220/month if he lives a long time. But there are many stories of people dying right after retirement without ever collecting their first check.
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You didn't say what his payout options are but it sounds like he is receiving a reduced benefit in order to pass on spousal benefits after he dies. If he were to take the option of receiving maximum benefits now, when he dies you would receive nothing.

WHEN WE SEND PAPERWORK IN, OPM WILL BEGIN DEDUCTING ADDITIONAL $15.00/mo until about $3K has been deducted for just electing the survivor benefit. In addition, every month, the annuity payment that he receives will be reduced by approx $220. for choosing to pass on the maximum survivor benefit. He could elect to pass on less, any amount he chooses, with proportionally smaller monthly reduction.

If you could get out a crystal ball and predict when he dies, you may come out ahead by investing the additional $220/month if he lives a long time. But there are many stories of people dying right after retirement without ever collecting their first check.

YES, THE CRYSTAL BALL PART IS THE MYSTERY. He is looking for new job, and doesn't have lack of interests problem that causes some people to feel their lives have stopped, which is wonderful. His is beginning again, smile. thanks!
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Greetings, Meowiz, and welcome.

<<My husband is 56, I am 42. We were married a year ago for first time. At that same time, my husband elected the "early out" from fed. gov.

He has named me as his survivor for the retirement annuity. In order to pass on the maximum possible from the annuity to me per month, in the event of his death, he will need to receive $220. less per month permanently while he is alive. The montly annuity payment he receives now is not his full retirement since he left early. My maximum survivor benefit would be $1300/mo from his annuity.

Question: is there a smarter way to invest the $220/mo? We just want to investigate before we make paperwork permanent. We have no children. I am self-employed with Keogh. >>

I agree with PSUEngineerFool. You are getting a Survivor Benefit Plan annuity from the federal government. You cannot match it at that price in the private sector because it is cost of living adjusted each year. As military and government employee pay goes up, so does the annuity. Perhaps you could invest that $220 per month and beat it, but you will be trading a sure bet for a risky bet. At your age differences, IMHO he is making a very Foolish choice by protecting you with the SBP.

Regards….Pixy

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At your age differences, IMHO he is making a very Foolish choice by protecting you with the SBP.

Regards….Pixy

Pixy, what does IMHO mean? Thank you for your very informative msg. Meowiz
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Meowiz,

<<...what does IMHO mean?>>

It's online shorthand for "in my humble opinion." Others you may see include:

FWIW = for what it's worth
OTOH = on the other hand
LOL = laughing out loud
ROTFL = rolling on the floor laughing
IMNSHO = in my not so humble opinion

These acronyms are used to save keystrokes and can usually be guessed fairly accurately based on the context in which they are used.

Regards....Pixy
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While we're on the subject, please, what is BTW?

Thanks - Minna
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minnat wrote:
While we're on the subject, please, what is BTW?

BTW is Beat The Windex, a strategy involving consumer products companies selected using the Leibniz Harmonic Oscillator.

Piz
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Piz

Are you pulling my leg?

Minna
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minnat wrote:
<<Are you pulling my leg?>>

Yes. ;-)

Piz

P.S. By The Way, has anyone told you what BTW means yet? ;-)
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Guess I should have said, by the way, are you pulling my leg.
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We seem to be overlapping. Thanks.

Minna
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<<BTW is Beat The Windex, a strategy involving consumer products companies selected using the Leibniz Harmonic Oscillator.>>

LOL Piz. Not nice.

BTW=By The Way
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