Split Level Option with 50% Husband and Wife Option
This option may appear attractive, but you are encouraged to seriously consider using your SIS Pension Fund money to supplement your retirement income between when you retire early and when you receive Social Security. By using the SIS Pension Fund instead, you will avoid the Pitfall (see below) of the Split-Level Option.
This option works just like the Split Level Option in that it provides a higher monthly benefit payment under Early Retirement until your Social Security becomes effective at age 62 or 65. At age 62 or 65, depending upon the option you elect, the benefit is reduced. Typically, you would want to have your pension reduced by about the amount you expect to receive from Social Security. Your pension will be increased by an amount less than you will receive from Social Security during the years before age 62 (or 65) and then reduced by the estimated Social Security amount. You can see the amount that would be payable to you at age 62 by using the NASI Pension Fund’s Pension Estimator.
Under this option, your pension will be reduced from the amount that would be payable to your under the 50% Husband and Wife option rather than from your full early retirement benefit amount. The example below shows the amount that would be payable for this provision until the retiree’s death in the event the spouse was still alive, the spouse's amount will continue at the 50% Husband and Wife amount.
For example, a 55 year old person whose Early Retirement amount from the NASI Pension Fund totaled $3,000 per month and whose spouse is about the same age would expect to receive $2,850 per month for the life of the sprinkler Fitter. This person also and expects to receive Social Security benefits of $1,000 per month at age 62 has the choice of doing
1) exactly that – getting $2,850 per month from the NASI Pension Fund until they reached age 62 and then adding $1,000 per month to the retirement income from Social Security at age 62 for a total monthly income at age 62 of $3,850 per month. When the Retiree dies, if the spouse is still alive, the spouse will receive 50% of $2,850.
2) choosing the Split Level Option with 50% Husband and Wife Option – this would increase the monthly payment from the NASI Pension Fund from age 55 until age 62 from $2,850 per month to $3,350 (in this example) and then at age 62, the NASI Pension Fund benefit would reduce to $2,350 and when the $1,000 from Social Security is added, a total monthly income of $3,350 is maintained. You “split” the NASI Pension Fund benefit to get a “level” income when considering Social Security. When the Retiree dies, if the spouse is still alive, the spouse will receive 50% of $2,850, just like the regular 50% Husband and Wife pension.
Pitfall – your pension will be reduced for the rest of your life after you reach age 62 (or 65, if that is the option you choose).
Back to Choose the Split-Level Option
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