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Although I have been retired over 15 years, I still receive employee benefit questions from a few employees and retirees of my old company. Sadly, many of those questions reflect the person not paying attention to their own situation, not planning, and thus putting themselves and family at risk.
Here is an example of a message I received recently.
“I retired in 2011 after around 35 years in Operations and Maintenance. I still stand confused on two things, maybe you can help me.
1. I receive a pension if and when I pass will my spouse still receive it?
2. Same with health benefits. We both get money from the company for health plans. If I pass will my spouse still receive what she gets now?”
“if” ? This guy is an optimist😎
Can you imagine being retired fourteen years and not knowing if and how your spouse is protected as a surviving spouse? I can’t, but over my career I saw it all the time. On too many occasions the failure to consider this part of planning was intentional. The worker wanted to keep all the benefits-mostly “his.”
When this person retired, he received written notice of the form of pension, his spouse had to agree to it in writing. After he retired he received a letter confirming the selection and the amount of the payments … and still, not a clue. Today, he can go to a company website and obtain all his information – but that requires awareness and initiative.
The company never paid health benefits for a surviving spouse and just three years ago this was explained in a extensive communication campaign for retirees – but it apparently didn’t make an impression.
Has he planned for this new expense someday?
I’m pretty sure the HD community won’t fall into this head-in-the-sand trap, but trust me, this is the real world for many, I would venture most, Americans. I am convinced many of the financial/life problems people face are of their own doing.
My wife is a lot smarter than I am. She was the one who forced the issue of buying Long Term Care Insurance. The gold-plated policy we purchased 25 years ago is no longer available. I had no idea what I was buying until 5 years ago when she qualified. Her premium is now waived, and mine is over $10K a year. The unlimited benefits for both of us are well worth it.
That’s quite a premium. We purchased LTC about 40 years ago. Our combined premium is $265 a month, but of course, there is a difference in the benefits. Ours is five years worth of nursing home care.
Are you sure unlimited is worth $10k? Anything over five years is unlikely.
There’s a lot of reluctance to ask for help out there.
Truly sad, but after all these years you surely can’t be surprised by these people, can you?
No, not surprised, but disappointed a bit. On the other hand after what I see on social media these days nothing surprises me. My limited confidence in human beings is slipping away.
Perhaps he just forgot
That’s a heck of an important thing to just forget. Besides he shouldn’t have forgotten how to look up his benefits or simply make a phone call. I wonder if he knows how much group life insurance he has.
Yea, you’re singing to the choir again. While I was licensed to sell insurance, I put together a voluntary long term disability plan for the local carpenters union. We did not have too many takers during the open window. Many months after the window closed I received a few phone calls from guys who became injured on the job, and now wanted to purchase a policy.
Things have changed so much through the years. I remember back when Grandpa retired, there was no available survivor pension for Grandma. She did get retiree health insurance, though. By the time Mom and Dad retired, he got the pension and Mom still gets 1/2 his pension today. She would get his union health care too, if the cost had not gone up so much (Dad was reimbursed for his Medicare premium, so that helped before he passed). She is on Medicare Advantage now.
To us today who have no retiree health care and only a small pension (but 100% survivor was a choice) that was changed into a 401k in the 1980s. My sister’s husband still had the 50% survivor pension so they opted for the lump sum and invested it. And, what if you got ALS like Spouse’s brother? SIL is still working through all the paperwork from when he passed. I will say that BIL’s company HR has been a help to her. It is like we all have to have so much more education in finances these days. And I can see where people can’t figure it out. It is a lot. Chris
I don’t know if this is accurate, but it seems that men are troubled less than women with minor health issues before retiring, giving us a sense that we’re going to live longer. Then we don’t (live longer). That was the case with my uncle. My aunt lived another 20 years after cancer took my uncle, leaving her with only SS to live on.
Mandatory survivor options were added by ERISA in 1975 and require the spouse waive in writing if they don’t want one.
Yeah, I wasn’t sure when that changed, I know it wasn’t available to Grandma. So it would have been available for Mom and sister. Thanks. Chris
It’s perfectly possible for the ordinary joe to not to read and absorb properly the barrage of finance related literature they get.
Then we get the people who remain wilfully ignorant disadvantaging themsleves – the “I don’t need a smartphone/computer/internet/spreadsheet 😉 ” types
What’s to be done. I suspect very little. I do anticipate an uptick in “go fund me” type begging appeals as the years progress. And possibly a further race to the bottom politicially as politicians realise that taxing the prudent to serve the profiligate/negligent might be a net vote winner.
“A spreadsheet is a digital document used to organize, analyze, and store data in a tabular format. It’s made up of rows and columns, forming a grid of cells.” so says Gemini
How exciting. 😱. It thrives on assumptions too 🙏🏻