Pension Option

AAA

DEFINITION of 'Pension Option'

A set of options that a pensioner has in regard to the handling of his or her pension. Pensioners must make choices that determine how the funds will be distributed, and they must weigh the advantages and disadvantages of each option to determine which will work best for their financial and family situation.

INVESTOPEDIA EXPLAINS 'Pension Option'

Some of the pension options from which pensioners must choose will determine if a spouse will continue to have benefits in the event of the pensioner's death, or if benefits will be paid only during the life of the pensioner.


Options that must be examined include lump-sum distributions, single life and joint and survivor pension payout options. For instance, if a pensioner opts for a single life annuity, he or she can expect larger monthly benefit payments, but a spouse will not be eligible to continue receiving benefits if widowed.

RELATED TERMS
  1. Pension Benefit Guaranty Corporation ...

    A non-profit corporation that functions under the jurisdiction ...
  2. Defined-Benefit Plan

    An employer-sponsored retirement plan where employee benefits ...
  3. Defined-Contribution Plan

    A retirement plan in which a certain amount or percentage of ...
  4. Pension Fund

    A fund established by an employer to facilitate and organize ...
  5. Retirement Planning

    The process of determining retirement income goals and the actions ...
  6. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
Related Articles
  1. An Overview Of The Pension Benefit Guaranty ...
    Retirement

    An Overview Of The Pension Benefit Guaranty ...

  2. Keeping Track Of Retirement Plan Assets
    Retirement

    Keeping Track Of Retirement Plan Assets

  3. Pension Law Could Reduce Your Payout
    Retirement

    Pension Law Could Reduce Your Payout

  4. How To Evaluate Pension Risk By Analyzing ...
    Investing

    How To Evaluate Pension Risk By Analyzing ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center