How To Maximize Your Pension (With Life Insurance)

If you have a pension and are close to retirement, this video is a MUST view. Byron Udell, Founder and CEO of AccuQuote discusses how most pension plans work and talks about another way to maximize your pension payout that you might not know about.

If you would like us to review your numbers for free, call us at 1-877-794-9817, and talk to a Pension Maximization Life Insurance specialist.




Hi. I’m Byron Udell, Founder and CEO of AccuQuote, and today I’ll tell you about a strategy you can actually use, to maximize your pension.

Each pension plan is different, and will have different characteristics, but when you retire, just about ALL pensions offer two main payout options: – the single-life payout and the joint-life payout.

Say your pension’s $3,000 a month. With the single-life payout, you get that full amount every month, like clockwork. But here’s the catch – under the single life option, the pension payments would end when you die.

The second option, the joint-life payout reduces the amount of your monthly pension – in this case, by way of example, let’s say it drops to $2,000 a month (that’s a big drop, I know) – but when you die…assuming your spouse survives you…that $2,000 monthly check would keep coming, ensuring that your spouse isn’t left with no income!

Now, what if I told you that there IS a strategy that could help you maximize your pension… providing you and your spouse with a higher monthly income to live on?

Not surprisingly, it’s called Pension Maximization. Here’s how it works. Let’s go back to that $3,000 amount again. Say you take that full single-life payout, and the put say $700 a month into a life insurance policy on YOUR life. That would leave you and your spouse with $2,300 a month to spend (which is more than the $2,000 you WOULD have had with the joint life pension option. When you die, your spouse would get the life insurance proceeds… which MORE than makes up for the fact that the pension payments would end.

Sounds too good to be true? Okay, let’s DO the math. Let’s say you plan to retire at age 65.

As we said before, your two main pension options are either single-life at $3,000, or the joint-life option at $2,000.

Just so you know, given those two choices, almost everyone chooses the joint-life option, even though it means losing $1,000 a month (or $12,000 a year) in retirement income, forever.

So, if you do what most people do, what do you get for the $12,000 a year you’re giving up?

Well, if you die first, your spouse’ll get to continue the $2,000 a month pension (or $24,000 a year) for as long as he or she lives.

What’s that worth? Well, it depends on when the first and second deaths occur. There are several possibilities. If you die first, and your spouse lives, say, 20 years longer than you…then 20 years, times 24,000…would mean that it’s worth $480,000.

But what if your spouse dies FIRST? Then you will have lost $12,000 a year in retirement income, all for nothing!

What if you and your spouse die together? Again, nothing. And what if you die first, and your spouse dies, say, 5 years later? Well, in that case, the 12,000 dollars a year you gave up will have bought your spouse five years of $24,000, for a total of 120,000 dollars over those five years.

But let’s say we start with the higher, single-life pension of $3,000. We take, say, $700 of that and buy a $400,000 life insurance policy on your life.

When you die, yes, your pension stops, but your spouse would receive the $400,000 payout. That, along with any earnings on that money after your death, would more than make up for the $2,000 a month your spouse would have otherwise received with the joint-life pension option.

And during your retirement, the two of you are now living on $3,000 a month, minus the $700 payment for the life insurance…so you have a net of $2,300 a month…$300 more than the joint-life pension option.

Now, if your spouse dies first. You could, if you wanted to, cancel the life insurance, and then you’d be right back to your FULL pension at $3,000 a month.

With Pension Maximization, at least someone is going to get something for the money you’ll be spending on the life insurance.
In our example, $400,000 will go to your choice of beneficiaries…kids, grandkids, or anyone else you choose. Again, if you had taken the Joint-Life pension option, and your spouse dies first, or anywhere near about when you do, YOU get totally screwed!

Of course, if you’re not healthy, well, then, you might actually have no choice but to take the Joint-Life pension option.

The truth is, you won’t know what’s best in your case, until you carefully compare your pension options to what may be available using Pension Maximization.