Obviously all pension insurance plans are different, but for military retirees, it's anywhere between 1 and 6% of the pension amount for the insurance to provide survivor benefits. You can elect a percentage (up to 55%) of the pension that you want to continue to be paid to a surviving spouse, and the cost is basesd on that. Maxing it out costs 6%. Considering that military pension payments get annual COL increases, 6% is a very small price to pay.
Off the top of my head, I don't remember the cost to "share" my pension with my spouse, but I do know that he and I have reviewed it more than once and have determined that -- for our circumstances -- it is too much.
Sounds like you want to retire very early.
Yes, that's been our plan for a long time -- note that I say PLAN, not dream or wish. My husband is already retired. I need to put in another two years, and I'll have "maxed out" my pension; at my age, if I don't put in my full 30 years, the deduction on the pension is just too much, and I have to put in the full 30 to keep my health insurance in retirement. We have never been high earners, but we have lived frugally and have substantial personal savings as well as 401K and investments, a small income from a passive stream, and a paid-for house -- and we are building a smaller, more efficient house that'll be elder-friendly. We have worked, planned, and saved.
I think the thing with ACA that surprised me is with my wife's best friend, who got a plan from the ACA exchange this year, discovered there are no primary healthcare Doctors in her town of 200,000 that accept ACA insurance. What good is insurance that nobody accepts?
I did not know this was an issue. I don't pretend to fully understand the ACA, but my overall impression is negative. We need to either stick with our old system, or we need to go all the way to socialized medicine -- not this half-way attempt.
Regardless, it seems that EVERYONE'S #1 fear concerning retirement is medical care. When essentially everyone is afraid of the same thing, it's the system, not the individuals.
Maybe they assumed to self insure with their own life insurance product, I've heard that option tossed around.
Life insurance can be a good answer to this share-the-pension question. I know that my mom is using this method; she and my stepfather each have a pension and a Social Security check, and they're doing quite well -- but he's in poor health, while she's quite hearty for a woman in her 70s. At some point her income will literally be chopped in half -- but I know she has a large life insurance policy on him, which she's had since they were married in the 80s. She will not be hurt
financially when he dies.
These were spouses who willingly waived the SBP because their husbands convinced them "it was too expensive." Then, after retiring, found out the active duty person was uninsurable due to health issues sustained during active duty and his subsequent VA disability rating. One guy did have a small amount of life insurance, and he died in a motorcycle crash. The $200,000 whole life policy he had didn't go very far, and the wife and kids had to move in with her parents. Both spouses had been stay at home parents.
These are only the two I personally know of. A LOT of people knowingly waive SBP, though, and then realize they didn't really understand what it would have provided after the fact. It's very sad.
It's not a pleasant topic, but everyone -- especially parents -- needs to calculate realistically what he or she would need in case of a tragedy. In this case, it sounds like they didn't bother to "do their homework", or they would've known he wasn't insurable. A mother left with children (don't know their age) would almost certainly need more than $200,000. At least the kids should qualify for the Social Security he will never use.
To take it a step further, the guy you knew was killed -- the story would've been even worse if he'd been disabled. If that had happened, he would have needed expensive care AND there still would've been no money. Well, no, he could've received care through the VA Hospital system. My stepfather, father-in-law and brother are all extremely happy with the care they receive through the VA. I'm getting off-topic: Everyone should consider disability insurance as part of the equation; a disability can be worse for the family than a death.
Have you actually added up how much you’ve paid over the years for Medicare? Because all it takes is one major illness when you are older to recoup every single cent you’ve paid into the system.
My mother had congestive heart failure (stage 4) and was too old to be considered for a heart transplant. Over the years she had 3 defibrillators put in. The bills for her first hospitalization and surgery were over $300,000. Each time the defibrillator had to be replaced was over $100,000. She had other health issues too, but her heart was the big one.
Huge medical bills. That is a fair point. But, to tell an opposite story -- my grandmother lived not-quite 100 years, and she really had no medical issues at the end. Oh, she slowed down and had mobility issues, but she had no disease: her heart was in good condition, her kidneys still worked, she never contracted any type of cancer. Sure did visit the doctor more often than she had in her younger years, but she essentially just wore out -- that seems to be what the women in my family do. Finally she contracted pneumonia and died in her sleep. She never had those big-big medical bills.
I was a stay at home mom for too many years. Because of that my husband made sure that if something happens to him I will be able to survive. I will get 100% of his two pensions, 401k’s, social security, life insurance, and no mortgage on our homes, so I will be ok financially.
That's good planning!
I was surprised that so many women that I worked with knew so little when it comes to their retirement benefits and how much they will receive from social security, spousal benefits, etc.
Yes, as a teacher I work mostly with women, and I see the same lack of attention to this very important topic. Amongst teachers, the attitude seems to be,
Put in your years for your pension and pay off your house, and you'll be fine. Is it just women, or is it everyone? I can't say.
I understand not being interested in this when you are young, but by the time you are closing in on 60 maybe you should do a little research.
Disagree: If you wait 'til you're near 60, you've used up your best saving years. If you save while you're young, the magic of compound interest is on your side!
this is the ONLY reason i stick with my awful overpriced PPO-if i leave it there's no coming back for myself or dh.
I'll say it again: Something's wrong with the system when everyone's #1 concern with retirement is medical expenses.