Pop-Up Option

AAA

DEFINITION of 'Pop-Up Option'

A joint and survivor pension option, generally limited to married couples, that is triggered if the pension plan member's spouse predeceases the plan member. The pop-up option then boosts the plan member's pension after the spouse's death. The increase in the pension amount is made possible by the fact that the pension plan no longer has to provide a spousal pension once the plan member passes away.

INVESTOPEDIA EXPLAINS 'Pop-Up Option'

This option has a cost attached to it. All things being equal, a plan member who opts for the pop-up option will receive a smaller pension than a member who does not choose the pop-up option. Since the plan member's spouse would receive this lower pension amount if the plan member passes away first, due consideration should be given to the relative states of health of the plan member and the spouse, in addition to which a cost-benefit analysis on the merits of the pop-up option itself may be necessary.

RELATED TERMS
  1. Integrated Pension Plan

    A pension plan that is tied to an individual's Social Security ...
  2. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  3. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  4. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
  5. Current Service Benefit

    The amount of pension benefit accrued by an employee who had ...
  6. Benefits Payable Exclusion

    An insurance policy exclusion that removes the insurer’s responsibility ...
RELATED FAQS
  1. I retired and transferred part of my pension distribution to a Roth IRA. If I am ...

    The age 55 exception applies only to distributions from qualified plans and 403(b) accounts. Once the assets have been credited ... Read Full Answer >>
  2. How much of an institutional pension fund's portfolio is typically investing in real ...

    It is estimated that institutional pension funds in the United States typically have about 5% to 10% of their assets allocated ... Read Full Answer >>
  3. How can I get a "pensionado" visa to retire in Costa Rica?

    In order to receive a pensionado visa and retire in Costa Rica, a retiree needs to fill out a list of key documents from ... Read Full Answer >>
  4. How can I get a 'pensionado' visa to retire in Costa Rica?

    The first and primary criteria necessary to obtain a pensionado visa in Costa Rica is that you must have a pension or pension-like ... Read Full Answer >>
  5. How does a pension income drawdown work?

    While there are similar drawdown plans in the United States, a pension income drawdown plan most commonly refers to a specific ... Read Full Answer >>
  6. What is fiduciary liability insurance, and what are its benefits?

    Under the Employee Retirement Income Security Act (ERISA), any individual who manages a employee benefit or pension plan ... Read Full Answer >>
Related Articles
  1. Retirement

    The Investing Risk Of Underfunded Pension Plans

    Determine the risk to a company's EPS and financial condition resulting from an underfunded pension plan.
  2. Options & Futures

    An Estate Planning Must: Update Your Beneficiaries

    Life changes make it time to rewrite your plan's designations.
  3. Investing Basics

    Top 6 Uses For Bonds

    Individuals and institutions can use bonds in many ways: from the most basic, such as for preserving principal or saving and maximizing income, to more advanced uses, like managing interest-rate ...
  4. Budgeting

    The Demise Of The Defined-Benefit Plan

    Experts are making bleak predictions for your post-work years. Be prepared and plan for your future.
  5. Mutual Funds & ETFs

    10 Retirement-Wrecking Moves

    Don't let these common mistakes put a crack your nest egg.
  6. Retirement

    How To Cure An Ailing 401(k)

    High-cost, outdated plans can prevent your retirement portfolio from thriving.
  7. Investing

    How To Evaluate Pension Risk By Analyzing Annual Costs

    Learn how to assess whether a company's pension plan is posing more risks than what the footnotes indicate.
  8. Professionals

    Finding a Top Financial Advisor in Canada

    Choosing a financial advisor is a difficult and important job. A ranking of Canadian advisors can help you make the right decision.
  9. Retirement

    How Are Dividends On IRAs Taxed?

    Reinvesting dividends in an IRA is a great way to grow your retirement funds faster, but be sure you understand the potential tax trap.
  10. Fundamental Analysis

    Should You Hire an Advisor or DIY Your Savings?

    Investors should consider index funds and robo-advisors before committing to a costly professional money manager.

You May Also Like

Hot Definitions
  1. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  2. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  3. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  4. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
  5. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
  6. Risk-Return Tradeoff

    The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!