death before retirement
DESCRIPTION
Death Before Retirement. -The Facts-. Meet Bill. Age 52 BYU Faculty for 20 years $54,000 Salary $4,500/month. Meet Bill’s Family. Spouse is 49 years old Three children, ages 22, 18, and 15. During a church basketball game the unthinkable happens. Fatal Heart Attack!. - PowerPoint PPT PresentationTRANSCRIPT
Death Before RetirementDeath Before Retirement
-The Facts-
Meet BillMeet Bill
• Age 52
• BYU Faculty for 20 years
• $54,000 Salary
• $4,500/month
Meet Bill’s FamilyMeet Bill’s Family
• Spouse is 49 years old
• Three children, ages 22, 18, and 15
During a church basketball game the unthinkable happens . . .
What income is available for What income is available for Bill’s family?Bill’s family?
Life Insurance PayoutLife Insurance Payout
Paid to beneficiary (spouse) – no taxes
• Group Term Life $50,000
• Supplemental GTL 6 x salary =
$360,000
SavingsSavings
• Estimated Accumulations– 3% salary increases– 5% savings + 4% match– 20 years
Total = $169,339• Transferred to primary beneficiary
(surviving spouse)
Master Retirement (MRP)Master Retirement (MRP)Qualified Joint Survivor Annuity (QJSA)
if taken at employee’s age:
Age 55 (first available) Age 65
63% for additional years 100% no additional years
95% for two-life 95% for two-life
50% for spouse 50% for spouse
$381.19 $605.06
Social SecuritySocial Security
Death Benefit $255
Spouse caring for child until dependent turns 16
$1,218/month
Child benefit from age 16 to 18 or until high school graduation
$1,218/month
Family maximum $2,848/month
Social SecuritySocial Security
Option 1
Age 60
Option 2
Age 66
Retirement Benefit $1,161/mo. $1,624/mo.
What benefits are available for What benefits are available for Bill’s family?Bill’s family?
Family Medical/Dental InsuranceFamily Medical/Dental Insurance
• Medical/Dental Insurance provided at no cost for a one-year period
• Changed to name of surviving spouse
• Dependent coverage during year limited to age 26, marriage, or employment with insurance
Family Medical/Dental InsuranceFamily Medical/Dental Insurance
• After one year of coverage:– Because Bill has twenty or more years of MRP
benefit credit:• Coverage continues and BYU pays its full part
Family Medical/Dental InsuranceFamily Medical/Dental Insurance
• If after one year of coverage:– Bill had more than ten years, but less than
twenty years of MRP benefit credit:• Coverage may continue and premiums are prorated
Family Medical/Dental InsuranceFamily Medical/Dental Insurance
• If after one year of coverage:– Bill has less than ten years of MRP benefit
credit:• Spouse and dependents are not eligible for
continuing coverage
• COBRA is an option for up to 36 months
Family Life Insurance CoverageFamily Life Insurance Coverage
Before After
Surviving Spouse
$2,000 GTL
$200,000 SGTL$5,000 SGTL
Dependents$2,000 GTL
$10,000 SGTL$5,000 SGTL
Family 24-Hour AD&DFamily 24-Hour AD&D
Before After
Employee 0 to $400,000 -0-
Spouse 0 to $160,000 -0-
Dependents 0 to $20,000 -0-
Tuition for SpouseTuition for Spouse
• Full-time benefit continues
• Benefit not extended to new spouse and step children if new marriage
Tuition for DependentsTuition for Dependents
• Changes from ½ tuition to full tuition
• Benefit continues if accepted to BYU-Provo or BYU-Idaho until the child:– Obtains a Bachelor’s Degree from any
university or college or– Completes 152 semester hours at BYU or– Reaches Age 30
Strategy for Use of BenefitsStrategy for Use of Benefits
Group Term Life $50,000
• Pay burial expenses
• Pay other family debts
Spouse’s Monthly IncomeSpouse’s Monthly IncomeMoney invested at 6% or single
premium life annuity paying at 6%
SGTL $360,000 $1,800
Thrift $169,339 $847
Total $529,339 $2,647
Social Security
Social Security for Spouse until child is age 16
$1,218
Additional Monthly IncomeAdditional Monthly Income
Option 1 Option 2
MRP At age 52 $381 At age 62 $605
Social Security Retirement
At age 60 $1,161 At age 66 $1,624
What if Bill had been age 55?What if Bill had been age 55?
Not Retired Retired
Life Insurance $410,000 $12,000
Master Retirement $470/mo. $871/mo.
• Take time to review your benefits package– Make sure your beneficiaries are updated
• Increase your life insurance if necessary
• Obtain a projection from Social Security
• Increase your savings if possible
ChallengeChallenge
Your family will thank you.
Representations made in this presentation are for educational purposes and should not replace an individual, personal consultation with your BYU benefits counselor or DMBA representative.
Questions?Questions?