If both spouses have pensions, should we choose single life or joint life?
By Seth Deal, CPA/PFS ·
It depends on whether the surviving spouse could live comfortably on their own pension, Social Security and savings if the other pension stopped. When both of you have a pension, single life on one or both can make sense, because each of you already has lifetime income of your own. If the survivor would be fine with room to spare, a survivor option may cost more than it’s worth. If it would be close, it’s usually worth paying for.
Your options with a Washington DRS pension
DRS offers four choices. Option 1, single life, pays the highest monthly benefit, and it ends when you die. Option 2 pays your survivor 100% of your monthly amount for life. Option 3 pays them 50%, and Option 4 pays them two-thirds.
The survivor options cost you a smaller check while you’re alive. How much smaller depends on your age and your survivor’s birthdate.
The question to run for each pension
Picture the household after one of you is gone. One pension stops, unless it had a survivor option. Social Security drops from two checks to one. Some costs go down, but the house, the car, insurance and property taxes mostly don’t.
Now run that test both ways, once for each spouse dying first. Couples often find the answer is different for each pension. A larger pension may be worth protecting, while the smaller one can take single life. You don’t have to make the same choice on both.
Things that change the answer
Health and age matter, and so does the age gap between you, since your survivor’s birthdate feeds into the reduction.
Savings outside the pensions count too, along with how comfortable the survivor would be drawing on them alone.
Some couples look at single life plus life insurance instead of a survivor option. That can work, but it’s a separate trade-off with its own costs.
Two rules worth knowing
If your survivor dies before you, DRS will change your benefit to the unreduced single-life amount. So choosing a survivor option doesn’t lock you into the smaller check forever if things go the other way.
And if you’re married and choose single life, or name someone other than your spouse, DRS requires your spouse’s notarized consent with your retirement application.
The bigger rule is the first one DRS lists: your survivor and benefit option become final once retirement begins, with only a few exceptions. This is the decision to get right before you file.
How I help couples decide
I’m a CPA and fee-only fiduciary, and before I was an advisor I was a public employee. In every plan, I model your DRS option, survivor benefit and start date before you elect, for both spouses, side by side.
A One-Time Plan starts at $3,000. The first step is a free 45-minute Retirement Clarity Assessment on Zoom, and it’s easiest when both of you can join.