Generally, you'll get 15 percent to 25 percent less per month if you take payments based on joint life expectancy rather than the employee's life alone. In most cases, if the retiring employee dies several years before the spouse, the joint-life expectancy will pay the couple considerably more over time even at the reduced rate. But if the employee is the one who lives longer, this option won't provide as much money. Statistically, men tend to die younger than women, but most plans don't account for gender differences when they calculate their pension payments, Kra says. You need to take a look at your own family and consider personal longevity issues.
Longevity tends to be determined by a combination of genetics and lifestyle.
If you're sick, you may not be able to do what the Fishbeins did even if you want to. The trickiest part of all this is figuring the right amount of insurance to replace a defined-benefit pension for the survivor, says Steve Lockwood, president of Lockwood Pension Services in New York. If the pensioner should die shortly after retiring, the survivor would need a lot of insurance. But if the pensioner should live for a decade or more after retiring, the spouse would need considerably less because he or she would have fewer years without the pension income. In deciding the amount of insurance you will buy, you also are making a guess about what kind of investment returns the survivor will get.