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Many couples will face the tough choice before retirement and
it could cost your children a big chunk of inheritance.
There is another choice for some couples and that is called pension maximumization. It is a fairly simple concept in that first, you would purchase a sufficient amount of life insurance on yourself prior to retirement and name your spouse as beneficiary. You then earmark the death benefit to replace the lost pension benefit if you die first. At the time of retirement, both you and your spouse opt tto take the single-life benefit option, receiving your maximum pension benefit for as long as you live. You then use a portion of the additional pension funds, the difference between the amount for a single versus a joint and survivor benefit to pay the life insurance premium. The younger you are when you make a decision like this the better due to the facct that life insurance rates are based primarily on a persons age. Therefore, the younger you are, the lower your rates would be. You will still get the maximum pension benefit for which you are entitled and your spouse will get to share in your benefit. If you should then dies first and your pension stops, your spouse's income will continue in the form of insurance proceeds. You can also set up the proceeds in the form of an annuity with income benefits guaranteed for life. If your spouse dies first, your pension benefits continue and the life insurance can be cashed in or the beneficiary changed. If you think this is something that may be right for you, contact your insurance professional and protect yourself.
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