No. of Recommendations: 1
I am retired from the military; we have to make a survivor benefit program decision at the time we retire. For me, it was the hardest financial decision I had to make in connection with retirement. There were a couple of factors that led me to take it (although we had the option to take it at various levels and I did not take the full amount):
- the payments to the survivor are inflation indexed; if yours are that might make it more valuable than you might initially think;
- the premiums for the program are paid with pre-tax dollars; if yours are also you will have to "gross-up" (by your marginal tax rate)the amount of income you would have to earn to pay an equal amount for an insurance policy.
- the real bottom line: my wife had spent 26.5 years of my 28 years of active duty with me, moving every 3 - 5 years and foregoing her own career opporunities. I couldn't put her in a position where she would have no guaranteed, regular income to sustain her if I fell to my death swinging from the chandelier at my retirement party.

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