Ask The Experts: Retirement

By Reg Jones

Pension and Social Security

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Q. My father is 66 and about to retire. He is a CSRS employee who has been told his pension will be reduced by $4,000 a year for having my mom as a dependent and that because she receives $500 in Social Security, at the time of his death she will not get much of his pension at all. He is thinking about having my mom opt out of his pension so they can enjoy about $300 more a month of his pension.

My and my mom’s concern is if he dies before she does, how will she care for herself with $500 a month, and how much really should she be getting of his pension if he dies first?

A. Tell your father to stop listening to people who don’t know what they are talking about. If he elects a full survivor annuity for your mother, his annuity will be permanently reduced by around 10 percent to pay for it. If he were to die, she would receive 55 percent of the annuity he would have received at his death if he hadn’t elected a survivor annuity.

The fact that she is receiving a Social Security benefit based on her own work record won’t change that, nor will her earned Social Security benefit be affected.

Warning: If she were to agree not to receive a survivor annuity — something she’d have to do in writing and have notarized — she would be out in the cold financially when her husband died. Further, if she was covered under his Federal Employees Health Benefits plan, she would be unable to continue that coverage.

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