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I am picking this line up from another post on another board because it is sooooooo important


Are you sure about that? Most pensions come with a joint option.

(from http://boards.fool.com/Message.asp?mid=24563775)



Everyone should at some point (soon?) take a deep breath and look into all of this stuff.


Start with Disability policies ... so many of them have changed over the past 10 years ... to put into the broadest of accounting and financial terms ... many just suck. Couple that with the chance of an individual having a heart attack or stroke under the age of 60 and surviving with a disability have gone up 100 X over ... in the old days, you just kicked the bucket and your family hoped you had life insurance.

Now, you may be disabled, unable to work, or at least do "your old job". A good policy might cover you with 2/3 of your salary for 2-3 years, maybe tax free, depending on how it is paid.

Depending on your condition, Social Security could take a couple years to be approved.

If you are not at "your job" what about "health insurance?" You your spouse and two kids on a full load policy with pharmaceuticals and low deductibles can cost $11-14,000 a year. .... Do with less? what if your "disability" causes you to need $1200 a month in newer med's without insurance, plus the testing and doctors? ... it's a wash.

Owning the best disability policy you can is essential.



Pension plans .... Understand what you have !

You get your retirement all worked out to the penny, and then find out that your Social Security check becomes taxable as income when your other taxable income from pensions and investments exceeds $ xxxx dollars .. Oh No !


Your spouse who was the participant in the "pension plan" that was going to make retirement "great" predeceases you and you find out then that the non-participant spouse would receive lifetime benefits of 50% of the gross pension that was being paid during the lifetime of the participant ... Oh No !


You are going to qualify for Medicare ... Oh Boy !!, but then discover a supplement is up to $480.00 a month.

The list goes on and on ...... Don't get caught uninformed. You know early enough, there are changes that can be made to offer protection.

Bears
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You are going to qualify for Medicare ... Oh Boy !!, but then discover a supplement is up to $480.00 a month.



If supplements are that expensive, I wonder if one is fairly healthy and has the funds if it might make sense to just take Medicare and "self-insure" for what it doesn't cover.....
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Your spouse who was the participant in the "pension plan" that was going to make retirement "great" predeceases you and you find out then that the non-participant spouse would receive lifetime benefits of 50% of the gross pension that was being paid during the lifetime of the participant ... Oh No !



Perhaps this is not universally true, but I believe in every case I've looked at, the spouse of the pensioner is required to sign a release form when the pension begins stating that he understands the terms of the pension. The exception occurs when the pensioner elects to take the reduced pension that remains the same for the widow(er) when the pensioner dies. In that case, the signature of the spouse is not required.

There wouldn't be a surprise when the spouse dies. There might be a surprise when the spouse prepares to retire, however.




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Perhaps this is not universally true, but I believe in every case I've looked at, the spouse of the pensioner is required to sign a release form when the pension begins stating that he understands the terms of the pension. The exception occurs when the pensioner elects to take the reduced pension that remains the same for the widow(er) when the pensioner dies. In that case, the signature of the spouse is not required.

The place where it can be sticky is pensioner begins taking pension and chooses own lifetime only for distributions. Pensioner later marries. It's usually too bad if pensioner predeceases spouse because that will be the end of the pension.

rad

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The place where it can be sticky is pensioner begins taking pension and chooses own lifetime only for distributions.

??? If the pensioner is unmarried when the pension begins, the single life option is the only one he has.


Pensioner later marries. It's usually too bad if pensioner predeceases spouse because that will be the end of the pension.

I cannot imagine that ANY employer would offer you an option to include a spouse acquired after the pension begins. Joint annuities are based on actuarial tables, not an imaginary spouse whose age is unknown. How could you possibly figure the payment without knowing the future spouse's age?

There might be an exception if you could get a "guaranteed income" option on the pension. (I don't know that you can, I'm just trying to contrive something here.) Such an option would guarantee a certain total payment amount regardless of how long the pensioner lived. However, it doesn't make sense that a single person would choose that option absent heirs. If they did have heirs, it doesn't make sense that a new spouse would assume such payments would not go to the previous heirs. In any event, even if that existed, it wouldn't last the spouse's lifetime, either.

I just cannot imagine a situation where it is a reasonble expectation that the pension payments would continue to the spouse after the pensioner's death. We might be able to contrive one, but let's be real. Anyone who marries a pensioner should not have any expectation of the pension continuing after the pensioner dies. People who have expectations based on highly contrived improbable scenarios surely have greater problems than this one.


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Well...for what it's worth, the <tongue in cheek> great Southern States,</tongue in cheek> paid the widows of the Confederate Army soldiers, regardless of when they got married.
http://www.confederate-rose.org/widow-Alberta_Martin.htm

I find this a remarkable example of how stubborn southern people can be.

On a more serious note, military retirement is able to be transfered to a spouse, whom you maryy, after you retire:
http://www.dod.mil/militarypay/survivor/sbp/10_start.html

Cheers,
Nuclear Redneck

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??? If the pensioner is unmarried when the pension begins, the single life option is the only one he has.

Calm down - it was an example of unforeseen circumstances and one that might require different or a change in planning. It wasn't a call to arms or implying that other options should be available.

rad
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On a more serious note, military retirement is able to be transfered to a spouse, whom you maryy, after you retire:
http://www.dod.mil/militarypay/survivor/sbp/10_start.html



Interesting example. It seems to be more like insurance, though, because payments are made. In any event, the ending of a pension should not come as a surprise to the spouse:

Elect not to resume spouse SBP coverage, in which case the spouse will be notified and the election cannot be changed.


That still does not constitute an example where the spouse will be surprised when the pension ends.


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<< ??? If the pensioner is unmarried when the pension begins, the single life option is the only one he has. >>

Calm down


My question marks were an expression of question, not high emotion. Sorry you misunderstood. It is the problem of lack of other cues that help in oral communication.


- it was an example of unforeseen circumstances and one that might require different or a change in planning.

Actually, it was not an example of that. I don't think anyone has cause to be surprised when a spouse's pension ends when the spouse dies. So far, we have no examples where the survivor shouldn't have known this in advance.



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Actually, it was not an example of that. I don't think anyone has cause to be surprised when a spouse's pension ends when the spouse dies. So far, we have no examples where the survivor shouldn't have known this in advance.

I suspect that there are still some women out there who may well not be aware of the family financial details - look for women over about 70 whose husbands are still alive. Should have known is different than did know.

There are posters who can't manage to read the inserts the credit card companies send. I'm sure there are people who sign "those papers for work" who also don't read them.

It's not a good thing but it still wouldn't surprise me. I doubt my mother actually understood the implications of my father's pension having no COLA adjustment. He died not long after retiring and she's still getting the same amount 25 years later.

I don't think anyone has cause to be surprised <I/>

Well, feel free to blame the survivor then.

rad


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I suspect that there are still some women out there who may well not be aware of the family financial details

I'm sure that's true. I think where we're disagreeing here is that I'm saying this can be known. You are looking at whether people actually know the facts.

A financial education is something everyone should endeavor to acquire. I remember a few years ago my Congressman repeatedly overdrew his Congressional bank account. When confronted with his misuse of the privilege, his excuse was, "They should have told me I was overdrawn."

I didn't buy his excuse. I don't buy the excuse of "I didn't know my spouse's pension would end when he died" either. To me it is about the same level of education as the checking account issue. Perhaps you think the pension thing is more advanced than that. I accept that not everyone will find it as fundamental as I do, and we can agree to disagree there, if you will.


Well, feel free to blame the survivor then.

What a very rude remark. I am not in any way blaming the survivor. Your assertion that I am is an unjustifiable attempt to smear me.


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What a very rude remark. I am not in any way blaming the survivor. Your assertion that I am is an unjustifiable attempt to smear me.

Whatever.

I have a financial eduation and have been on the boards since 97. I've taught a number of free financial workshops as well as doing scout badge work in financial areas. It would be nice if everyone knew everything about personal finance. Some people just don't.

With this post, I'm done with this thread.

rad

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<<I have a financial eduation and have been on the boards since 97. I've taught a number of free financial workshops as well as doing scout badge work in financial areas.>>


Are you a Personal Management merit badge counselor? I've always thought that contained some excllent exercises in financial management that most young men would benefit from understanding.



Seattle Pioneer

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Do they even make badges big enough to cover the chip on that shoulder?


MP
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A financial education is something everyone should endeavor to acquire. I remember ... "They should have told me I was overdrawn."

... I don't buy the excuse of "I didn't know my spouse's pension would end when he died" either. To me it is about the same level of education as the checking account issue.


tmeri,

I think you are preaching to the choir here. We are on the Fool because we are involved in our/our spouses finances and are taking charge of our own financial lives. In some households, the computer is for e-mailing jokes to friends and relatives. In some it is to learn at the Fool, in still others there is no computer. There are some men out in the world who don't know there are different screwdrivers or hammers for different jobs. Just as there are people who are totally clueless about simple finances. My parents were like this - dad made the money, mom took care of the finances. Dad knew there was money and what was coming in each month but was a lousy investor, managing to lose a couple of fortunes. Mom was a LBYMer and managed to save enough for them to retire 'comfortably'. If she had died first, dad would have been lost or would have given it to scammers.

The point is not all people are smart investors. Nor do all people read what their employers(or banks, financial institutes, pension funds, etc) require them to sign. Barnum was right - there is a sucker born every minute!

WyneFool - reads annual reports, 401k programs, legal docs, etc -
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Bears:

You are going to qualify for Medicare ... Oh Boy !!, but then discover a supplement is up to $480.00 a month.

You may want to look harder at what Medigap (supplement) plans are available. We're both on Medicare. When we started a year ago, we had some Medigap offers, but finally went with AARP's Medigap plan. It now costs a total of $242/month for BOTH of us. And there were other plans that may have been even cheaper.

Yes, look carefully at what you have, what you will have, and what you honestly expect to need to live on. Total all the expenses up and then total all the pensions/SS/whatever up and compare. We did and it came within $100/month -- for a couple of years, anyway!

Vermonter
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My Father, bless his heart, only had a grade school education -- Depression times -- but he was very financially savy -- all self taught. He worked in a plant, as well as owning a hobby farm, and he checked out the paper work for his pension. He noticed that for a small amount more on the premium he could make sure that my Mother got the full pension for the rest of her life in the event of his death. He went right up to the office and made the change in the paper work. As a result, my Mother got a good pension -- the full pension after his death. Dad also fortunately was smart enough to take early retirement and enjoyed 20 yrs. of retirement on his farm. I remember him saying he told several other men who worked at the plant with him, and they went up to the office and made the changes too. No doubt many widows were comfortable just because my Dad paid attention to anything he signed, and he was kind enough to warn others. We have often said how his thoughtfulness made it easier for us after his death at 83. I made sure all my paperwork is in order so it will benefit my family as much as possible after I "depart". One thing I warn everyone about is not to buy an annuity if you have any heirs you care about, because there will be no capital left for them after your death. You can set up an accout with them as the beneficiary, and/or name them in your will just as easily. When insurance companies sell annuities they do not explain this very well for good reasons. Upon your death they get everything.
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