As you may or may not be aware there are four options available to you when you retire from the State of Florida in either entering DROP and/or taking a monthly pension benefit.
Option one provides a lifetime benefit but nothing to your spouse when you pass away.
Option two provides a life and 10-year certain. This provides a benefit to you for life but should you pass away within the first year, a continuation of the benefit to your spouse for at least 10 more years. Under this option, If you pass away in the 10th year, there is nothing to your spouse. Option three is what I refer to as the spousal benefit which provides approximately 1/3 less income for you and a similar amount of money to your spouse for the rest of his or her life. Option four provides a similar amount to option one, slightly less and then half that amount when you pass away to your widower.
As an example, option one might provide 3,000 per month forever but nothing to your spouse when you pass on. Option #2 would provide a slightly reduced benefit to the tune of 2,900 for the life on the retiree and a guarantee of this same amount of money through the 10th year should the retiree die during the first 10 years. Option 3 would provide 2,335 forever and the same benefit to the spouse when the retiree passes on. Option # 4 would provide 2,571 to the retiree and 1,714 to the living spouse upon the death of the retiree.
Which option is best for you depends on a number of factors. This is where we are able to help.
Securities and Advisory Services offered through Geneos Wealth Management, Inc., Member FINRA/SIPC.