ATM & Office Locations

List all SEFCU Locations

couple in kayak

Pension Maximization

Maximize your pension for greater retirement income and survivor benefits. SEFCU Insurance Agency explains your options.

Use Your Pension to the Max!

If you’re nearing retirement, you’ll soon be making crucial decisions that will affect how you receive income from your pension. Pension maximization lets you make the most of your pension by combining the advantages of life insurance and annuities.

What Does Pension Maximization Do?

Pension maximization employs both life insurance and your annuity so you and your spouse can maximize the potential income benefits as long as you both live. Here’s how it works:

Step 1: Before retirement, you purchase a sufficient amount of life insurance on yourself for the death benefit to replace lost pension benefits if you die first.

Step 2: At retirement, you opt to take the single-life benefit annuity option — receiving maximum income from your pension.

Step 3: Use the additional income you receive from that option to pay your life insurance premiums.

OPTION A: Single life annuity

Receive your entire pension as income for as long as you live. This will provide greater income, but a loss of benefits for your spouse in the event of your death.

OPTION B: Joint and survivor annuity

Receive lower income payments, but continue benefits for your spouse in the event of your death. In the event of your death, the tax-free proceeds from the life insurance policy can be used to purchase a new annuity. And, since the survivor is now older, he or she will receive a higher income from the same capital.

Tax Information 

As with any long-term strategy, it’s important to talk to your financial and tax advisors about benefits and tax consequences.

Learn More about Pension Maximization!