Annuity Options: How Do You Want Your Retirement Benefit?

With seven ASRS annuity options available to you, how do you decide which one is right for you? Narrowing the choices down is a good place to start. Ask yourself what you are trying to accomplish financially when you retire. Most members respond in one of three ways:

1. “I want to receive the maximum monthly amount possible and don’t need to worry about providing money for a beneficiary.”

If this is your goal, then Straight Life Annuity (SLA) is the option you are looking for. It provides the most money you can receive each month, but it does not guarantee any benefits to your survivors after your death. 

NOTE: This option is only available to married members if their spouse has waived their rights as beneficiary via the Spousal Consent form. Otherwise, members who are married are required to name their spouse as a beneficiary and select a joint-and-survivor annuity option of 50% or more. 

2. “I want to make sure my beneficiary continues to receive all or a portion of my pension for the remainder of their lifetime.”

If you want to make sure your beneficiaries receive a payment for the remainder of their life, you will want to consider the Joint and Survivor Annuity which offers three options: 100%, 66-2/3% and 50%. If you elect one of these options, you will receive a reduced monthly benefit upon retirement for the remainder of your life. Your beneficiary will then receive a benefit in the amount equal to the elected percentage of your benefit. Age restrictions do apply for the 100% and 66-2/3% options, but not for the 50% Joint and Survivor option.

3. “I want to leave money for my beneficiary, but only for a set period of time.” 

If you wish to leave money for your beneficiaries for a defined amount of time, you will want to consider the Life Annuity which offers three options: 5-Year Certain, 10-Year Certain and 15-Year Certain. If you elect one of these options, you will receive a reduced monthly benefit upon retirement for the period of time selected, after which you’ll be converted to a Straight Life Annuity and your benefit payments will be  automatically be adjusted. If your death occurs before your designated time period, benefit payments will continue to your beneficiary until the designated time period has been achieved. At which point they would stop receiving any payments.

For more information about your Annuity Options, please visit the Retirement Annuity Options page of the ASRS website.

Written by Pam Foust, Communications

Published in Expanding Your Financial Horizons digital newsletter May 2019

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