Taking Care of Your Survivors With Your Social Security Benefits

A US Office of Personnel Management report shows that it has received close to 70,000 retirement claims to be processed so far this year. There will probably be an additional 30,000 to 40,000 more by the end of the year. 

Are you about to enter retirement? If so, choosing the kind of retirement package you desire will be one of your most important decisions.

Do you wish to get benefits only once in your lifetime? Or do you prefer a retirement plan that will pay another person if you pass away before they do?

You have four options for how your benefit will be handled if you choose the latter strategy. This article examines all of them.

1. A lower annuity gives your spouse the maximum survivor annuity.

If you were married at the time of your retirement, the law gives your spouse the right to this annuity. If your spouse outlives you, they will receive 50% of your unsaturated Federal Employees Retirement System (FERS) benefit. The benefit is still payable no matter how long your surviving spouse lives.

Your spouse’s name, Social Security number, date of birth, location and time of your wedding, and officiant must be listed on your retirement application to establish whether you are currently married. A duplicate of your marriage license is also required.

Your spouse will not be entitled to the survival benefit if you marry after the retirement date. You’ve got two years to make up your mind about whether or not to give it to them. Making this choice is crucial because, once you do, no adjustments are allowed unless your marriage dissolves due to death or divorce. You have two years after the divorce to decide whether to give your ex-spouse a survivor annuity. Ten percent of your unsaturated retirement payout is deducted to deliver the highest survivor annuity benefit.

2. A diminished annuity pays your spouse a portion of the survivor annuity.

Your FERS retirement payment will only be cut by 5% if you select this option, but your intestate succession will only be eligible for 25% of your payout instead of 50%. In general, the partial survivorship election is exercised if your spouse only requires your health benefits and not your annuity income.

Because your spouse is entitled to the whole annuity described above, you should note that this decision requires their notarized permission. There are a few rare exceptions to this rule, such as when your spouse is nowhere to be found or in other unusual situations judged by a court.

3. An annuity that is only payable for your lifetime.

Your retirement is unaffected by this. However, if you are dead, your health insurance and retirement annuity coverage expire (unless you have a survivor child eligible for a survivor annuity).

The notarized consent of your spouse is necessary for this choice. If they are not eligible for their government retirement benefit, they will be unable to continue receiving health benefits.

An individual that has “insurable interest” in you would receive a reduced annuity and a survivor annuity.

You can designate a beneficiary to earn 55% of your decreased FERS retirement payment as a survivor annuity if you are considered insurable and can show medical documentation of your good health. The individual must have a monetary need depending on the life expectancy or be first cousins or a close relative. If you are planning to get married, your fiancé likely depends financially on the money from the retirement benefit.

You must both agree to waive the current spouse survivor annuity if you list your present partner as your insurable interest. If a court ruling provides a spouse survivor pension to your former spouse, this alternative offers a way to support your current spouse.

Depending on the age gap between yourself and the person you designate, the amount of your retirement will be decreased to offer an insurable interest annuity. Your FERS retirement payment will be reduced by 10% if the person is less than five decades younger than you or older than you by five years. If the individual identified is 30 years or younger than you, this decrease rises by 5% for each subsequent five years of their age, to a maximum of 40%.

4. A survivor annuity for your former partner along with decreased annuity.

You will want the approval of your present spouse if you are married to make this choice. The amount you can provide to your current spouse will be capped by any benefit you choose for your ex-spouse.

Contact Information:
Email: cev@fortunefinancialservices.com
Phone: 7242723902

Bio:
Craig E. Vukich is a 35 year retirement specialist and Financial Advisor who has helped thousands of clients all over the country with their investment portfolios and retirement strategies.
In that time, Craig has also helped seniors and retirees with their Medicare options as healthcare continues to be one of the most confusing issues facing people today.
Personally, Craig lives in Beaver Falls, Pa with his beautiful wife and childhood sweetheart Barb and their lovely daughter Shalyn.
Craig is a graduate of Westminster College which is about an hour north of Pittsburgh. Craig is a recreational golfer and traveler and Pittsburgh sports fanatic.

Disclosure:
This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.

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Craig E. Vukich is a 35 year retirement specialist and Financial Advisor who has helped thousands of clients all over the country with their investment portfolios and retirement strategies. In that time, Craig has also helped seniors and retirees with their Medicare options as healthcare continues to be one of the most confusing issues facing people today.Personally, Craig lives in Beaver Falls, Pa with his beautiful wife and childhood sweetheart Barb and their lovely daughter Shalyn.Craig is a graduate of Westminster College which is about an hour north of Pittsburgh. Craig is a recreational golfer and traveler and Pittsburgh sports fanatic.

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