Pension Maximization
Pension Maximization is a retirement planning method that can help your clients receive maximum retirement benefits and guarantee survivor income after the retiree’s death.
Pension Guard, a group annuity from United of Omaha Life Insurance Company, provides an excellent solution for your clients in these situations:
Here’s How It Works:
- The retiree selects the life only annuity option and uses the excess income (e.g. the difference between the life only and joint and survivor income amounts) to purchase a life insurance policy.
- If the retiree predeceases the spouse, the latter receives income in the form of tax-free life insurance proceeds.*
* Under current federal income tax laws
For Example:
Benefit Payout Options
A 65-year old retiree uses a portion of his retirement plan savings to purchase an annuity.** The life only option provides the maximum pension income for the retiree’s life but with no benefit for the surviving spouse. In contrast, the joint and survivor option provides a benefit for both lives, but in an amount just 75 percent of that provided by the life only option.
Retiree and Spouse Alive
- Life-only option - $3,000 per month
- Joint and survivor option - $2,250 per month
Only Spouse Alive
- Life only option - $0
- Joint and survivor option - $2,250 per month
If selected, the life only option provides the couple above an extra $750 per month in income. Assuming the retiree is insurable, it may benefit them financially to purchase permanent life insurance that would provide monthly income equal to or greater than the joint and survivor option’s $2,250, at a premium less than $750 per month. Doing so could help the couple make the most of their retirement income – and provide added financial protection of the spouse.
** This is a hypothetical example. Premium and payout amounts will vary based on individual data for the person for whom an annuity is purchased.
