Chapter 11 Summary:
Electing to take the reduced employee pension is often not the optimal way to provide for a spouse. This election will typically benefit the employer, which is why it is often offered with fancy names like the Buy-up option and life-plus-spouse election. You need to see a planner who is knowledgeable about your pension elections and willing to help you with these issues. The earlier you start, the better your options will be.
It is also wise to evaluate your pension’s payout structure. Some pension plans provide nothing to your spouse if you die before retirement age. If this is the case, you need to make plans to protect your spouse. Also determine if your pension is covered by the PBGC.
In general, counting on your pension may be a mistake. It is wise to think of your pension as icing on the cake and not as your primary retirement income.