As an Entergy employee you’ve had a long career and built a solid retirement for you and your family. As you get closer to retirement age, there is the constant question of when is the right time to start the next phase of life. Of course you want to maximize your benefits, but you also want to maximize your time. Sometimes life happens and it can throw your plans for a loop. Today we want to talk about some of the scenarios that could happen and help you understand your choices in the event you were diagnosed with a terminal disease while still employed at Entergy.
First, one would need to decide if you are going to retire or go out on short-term disability, then long-term disability. Every situation is different, but some of the things you need to know are:
- If someone dies while still employed, only their spouse is entitled to a Survivor Pension Benefit.
- Your spouse will get the amount of the 50% Joint & Survivor Annuity.
- If you were not married, no one receives pension payments.
By retiring, you could select the 100% Joint & Survivor Annuity and in so doing, leave the maximum pension to your spouse. If you are not married, you could choose a 10-Year Certain and Life Annuity that would allow someone other than a spouse to collect your pension after your death for 10 years from the date of your retirement.
Based on that information, it might seem that retiring would be a good option, but it’s important to remember your employee life insurance. Many employees have a life insurance policy worth 4 times their salary while they are employed. If you retire, that policy would go to ½ your base salary. Since life insurance policies are usually paid out in a tax free manner and you can select anyone as your beneficiary, it is possible that staying employed is the best financial option for your family in the event of a terminal diagnosis.
However, there may be a way to get both your pension and keep your maximum amount of life insurance. This is determined on a case-by-case basis, and involves working with your Entergy Human Resources representative. The advisors at Sound Financial Strategies Group want to help you through these difficult decisions in the event you or a family member receives such terrible news. The emotions one must go through when told that they have “X” amount of months to live are unimaginable. As one Entergy Lineman explained it to me, “Probably feels something like being hit with secondary voltage. You know that the end is coming, but you are locked on that line and there is nothing you can do to get off of it.”
At Sound Financial, we believe that one’s faith is more important than their finances. If you knew that your time in this world was about to end, it is critical that your relationship with God is in just as good an order as your portfolio. Give one of our advisors a call today. We take pride in our ability to understand and implement your options.
Investment advisory services offered through Sound Financial Strategies Group, Inc.("SFSG"), a Registered Investment Adviser. Securities offered through Comprehensive Asset Management and Servicing, Inc., ("CAMAS") Member FINRA/SIPC. SFSG and CAMAS are separate and unrelated companies. Neither SFSG nor CAMAS are endorsed by, retained by, or affiliated with Entergy.
The information in this article is not intended to be tax or legal advice. You are encouraged to seek tax or legal advice from an independent professional adviser. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion express constitutes a solicitation for the purchase or sale of any security.
Posted on Mon, May 18, 2015
by Sound Financial Strategies Group