With a traditional or defined-benefit pension plan, you have to make a choice at retirement. You can take full benefits for as long as you live. Or take reduced benefits, and they will continue for your spouse as long as he or she lives.
If you’re in decent health at retirement, most financial advisors recommend you take full benefits. Then, buy a Term Life Insurance policy with the spouse as beneficiary that, if you die first, will provide the income the spouse needs.
The difference between what you would receive taking full versus reduced benefits can usually more than cover the premiums for a hefty Term Life policy. Especially today, when Term Life Insurance rates are especially low.
It’s easy to determine if this strategy is right for you. Just ask your benefits counselor at work what your full benefits package would be each month vs. reduced benefits.
Then go online and shop an independent Term Life Insurance sales agency that provides free quotes and represents several highly rated Life Insurance companies. Chances are you’ll be way ahead taking full benefits and buying the Term Life Insurance.