Question:  I am getting ready to select how I want my pension to be paid, when I retire.  Do you have any advice about the various payment style options?

Answer:   Congratulations.  Pensions are becoming a rare benefit, offered primarily to public sector or union employees.  You are afforded the option to select payment options which can either

  1. Give more money per month, but payments stop when you die or
  2. Give less money per month, but continue paying to your spouse, after death.

To make your decision:  compare your age and health to your spouse.  If she is 10 years younger and super healthy, consider the chance she will outlive you by many years, and lean toward option b).  If not, option a) may suit you better.  However, understand the risk you would be taking.

Despite young age and robust health, we are all susceptible to sudden changes.  (If Patriots hall of fame linebacker, Teddy Bruschi can suffer 2 strokes – we are all at risk.)

Ask yourself:  will you and your spouse truly rely on this pension money?  Can you afford to make the wrong decision with this money?

To mitigate the risk of selecting higher payments during your life, consider life insurance.  A simple $100,000 or $200,000 policy may be cheap and cover the loss, if death comes early.  Tip:  take steps to avoid a missed payment, resulting in a policy termination.  Some elderly people easily get behind on their bills, if they are hospitalized, or move often.

Attorney James Haroutunian practices real estate law, estate planning and probate law in Billerica at his new office location: 790 Boston Road.  Contact him with questions at,, 978-671-0711 or email him at

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