Pension Survivor Benefits vs. Life Insurance Retirement Spitball Analysis

Andi, Joe, and Bigger than Life Al, greetings from frozen tundra of Chicago in winter. Been listening with rapt attention since the beginning of the pandemic. Still running daily through all the seasons of Chicagoland (what locals call the greater Chicago area) and look forward to Wednesday mornings so I can catch the latest edition of YMYW. Sadly, the new episodes don’t drop in time for me to listen to on Tuesday mornings. My drink of choice is coke zero to get me through the day. I’m a married 62 year old dude, and to hope to retire within the next 2 years based on market conditions. When I retire, I’ll have a non-COLA monthly pension of about $6,000 based on a single life annuity. If I opt to get full survivor benefits for my smoking hot 60-year-old wife, I’ll get about $500 per month less in pension payments. It seems like another option would be to take the higher single life pension payment and get some type of life insurance policy for myself that would provide the financial benefits for my wife if I were to pass first. From a cursory look at insurance options, it would appear that life insurance would cost less than the reduction in the monthly pension payment. Would you please discuss the pros and cons of this strategy, or a little spit-balling on the topic. Basic breakdown of assets, 1.5 million in IRA, 300K in brokerage account. I have the pension already mentioned and plan on a healthy social security payment monthly starting at age 66. Thank you for a fantastic show and if I could figure out how to give you 5 stars in the google podcast app I certainly would. - Tom, Chicago

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