Deferred annuity and survivor annuity


Q. I resigned about 12 years ago as a FERS employee after working for 17 years. My 61st birthday is approaching, and I want to take a deferred annuity with a full survivor benefit. I understand that because I’m retiring one year before I turn 62 I will be penalized 5 percent. I also understand that the cost of a full survivor benefit is 10 percent. I further understand that the survivor benefit is normally 50 percent of the unreduced annuity. And lastly, I understand that if my survivor were to die before me, my annuity would return to its “base amount.” My questions concern how these reductions are to be applied for my situation and how they affect my survivor. To keep this simple, allow me to assume that my gross unreduced annuity is $1,000 monthly.

1. I get that my 5 percent reduction for retiring at 61 instead of 62 would bring my annuity down to $950 monthly, which I believe would then be my “base amount,” but what is my cost for a full survivor benefit: 10 percent of $1,000, or 10 percent of $950?

2. What would be the amount of my survivor annuity: 50 percent of $1,000, or 50 percent of $950?

3. If my choice for a survivor annuity were to predecease me, what would my annuity then increase to: $950 or $1,000?

A. 1. 10 percent of $950.

2. 50 percent of $950.

3. $950.


About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

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