HOW PENSION MAXIMIZATION WORKS

When it’s time to make their pension payout decision, many people unknowingly choose an option that could cost them and their family in the long term. Know how Pension Maximization works so you can determine if it's the right fit for you and your family.

GET CONNECTED WITH A LOCAL PENSION ADVISOR

KNOW ALL THE STEPS INVOLVED WHEN IMPLEMENTING PENSION MAXIMIZATION

The Goal of The Pension Maximization Strategy is to Allow Pension Holders With Spouses and Families to Be Able to Choose The Single Life Option to Receive The Maximum Pension Payout And Still Provide Continued Income and Financial Security To The Beneficiaries.

Step 1

You get educated. In our experience this starts with pensionmax.com and graduates to a conversation with a local financial professional well versed in the NYS pension and benefits system.

Step 2

As part of this education you will be provided with a pension analysis as well as a recommendation on how to best maximize your pension within the context of all available financial resources and goals.

Step 3

If a pension maximization strategy is appropriate, you will be presented with a life insurance proposal designed to allow you to take your maximum pension, while protecting your spouse and/or children and possible grandchildren.

Step 4

After being educated on all facets of your pension options, the pension max strategy and life insurance policy, you will be given the space to determine your best course of action. In other words, you are in control, will incur no cost, and will have no further commitment to the Financial Professional unless you choose to formally engage in the purchase of a life insurance policy or other financial services from the professional. If you experience any doubt, you should not move forward. You should feel completely at ease, educated, and comfortable with the professional you are working with.

Step 5

Now that the pension max strategy is in place, you can confidently choose your maximum pension payout option (Single Life Allowance) at retirement.

So what happens in retirement if you die before your beneficiary as the pension holder? The life insurance death benefit can either be taken as a lump sum, completely tax-free from Federal and State taxes, or a lifetime income for your beneficiary (often a spouse) can be created for the rest of their life.

What happens if your beneficiary dies before you? If this happens, you as the pensioner will continue to receive your maximum NYS pension for the rest of your life, and the beneficiaries on your life insurance can be updated to provide a tax-free death benefit to your children, grandchildren, and/or charity.

Step 6

In conclusion, if appropriate, a pension max strategy may:

1. Allow you to select the maximum pension that you earned.

2. Protect your spouse to an equal or greater level than the pension reduction would have provided.

3. Provide access to cash surrender value within a properly designed permanent life insurance policy that can be used to supplement your retirement or other financial obligations.

4. If elected on your permanent life insurance policy, provide for accelerated living benefits that may provide tax-free benefits in the event of a critical illness such as a cancer, heart attack or stroke, or a chronic illness such as Alzheimers or Dementia.

5. In the event that your spouse predeceases you, the tax-free residual death benefit can be passed on to your children, grandchildren, or charity when your time comes. These and many more benefits can be had if the pension max strategy fits your circumstances.

For those who are married, have a significant other, or children, having their pension cease upon their death is not an option they would choose. So the next thing the pensioner does is look at their list of other options. All of these other options involve reducing their benefit, and the more you want to protect, the more expensive they will be. In addition, the age difference between the pensioner and the beneficiary has a major impact on the cost. Electing a younger spouse or child as a beneficiary could cost thousands of dollars each year. So what do you do? This is where a Pension Max comes in for those who it is appropriate for. Instead of taking a reduction in your pension, you take your full pension, and the money that you would have given back to the pension plan is used to buy a properly designed permanent life insurance policy.

LEARN MORE ABOUT PENSION MAXIMIZATION

KNOW THE BENEFITS OF PENSION MAX

There are many benefits to the Pension Maximization Strategy for qualifying pension holders. Learn how it expands your retirement plan opportunities.

DISCOVER BENEFITS

SEE WHEN PENSION MAX ISN'T FOR YOU

Pension Maximization is not the right strategy for all NYS pension holders. Find out when this may not be a fit for your retirement plan.

WHEN PENSION MAX ISN'T RIGHT FOR YOU

TAKE THE PENSION MAX QUIZ

Not sure if you qualify to Maximize your pension? Take the quiz and find out.

TAKE QUIZ