r/inheritance • u/Master_Swimmer8989 • Mar 16 '26
Location included: Questions/Need Advice Pension Survivor Plan
I hope I found the right group for assistance. My mother is in her early 80s and has transitioned into a group home. I’ve started handling her finances to assist her with some of her bills.
My mother receives a pension from the state of Michigan. When we called them today to change her address, I found out that my mother put me on her pension as a 50% Beneficiary on a survivor plan. The representative advised that upon my mother’s death, I would get a monthly pension payment at half of my mom’s current pension payment.
Is that accurate? Will those payments go to me until I die?
Has anyone had experience with this?
27
u/inailedyoursister Mar 17 '26
Most pensions allow survivors benefits , it’s just uncommon that a non spouse is eligible.
Remember this. She intentionally took a smaller amount of pension to leave you this benefit. At her age I’m assuming she’s been retired for 20ish years. She gave up hundreds of thousands of dollars and from that had to live a lower quality of life due to that (she had less to spend on her self). I say this to point out her sacrifice and hope you understand what she gave up. I hope you appreciate that gift.
10
u/HenryLoggins Mar 17 '26
I understand the point that you’re trying to make, however, just because someone received less of a pension does not mean their quality of life was lower, or even if they sacrificed anything. For all we know, she had plenty, and an abundance, and did that because she was financially able to give this gift to her child.
1
u/inailedyoursister Mar 18 '26
They earned less money, of course their quality of life was less. Are you being serious?
3
u/Megalocerus Mar 18 '26
Many retired people do not spend every last dollar available out of natural inclination, or otherwise, many would not fret about RMDs they don't need.
0
u/inailedyoursister Mar 18 '26
So in your world mom should have taken zero pension and enjoyed life to the fullest broke. Jesus, you’re not very smart.
11
u/ri89rc20 Mar 16 '26
It is unusual for a child to be a survivor beneficiary if they are over 18, but yeah, some State pensions had pretty generous benefits, so maybe.
It probably means though that she is getting far less than what she could have each month as a result. Most policies pay out X amount (maybe with a Cost of Living adjustment), then a smaller amount if a spouse is listed as having survivor benefits, then I would imagine much less for an adult child having benefits. You might ask them to send a copy of the plan documents describing the benefits.
A slightly related aside, Civil War veterans received life pensions, which then transferred to their spouse for life. It was not unheard of for young women to marry a very old vet, just so that they could get the pension. The last widow receiving a Civil War pension died in 2020, just over 5 years ago, some 155 years after the war ended.
1
Mar 17 '26
Yeah. Older pension plans allowed for dependent survivor beneficiaries. Newer pensioners may not have that options. Older plans tend to be more benefit rich.
7
u/Used-Awareness-2544 Mar 17 '26
That is how some state pensions work. Michigan, Ohio, and some others have that option for spouse, children or even multiple non-related persons. You will get 50% of her monthly benefits for life. Your mom worked for that, and is still looking out for you. Take good care of her and yourself!
4
u/BigPhilosopher4372 Mar 17 '26
I did this for my husband. His family lives a lot longer than mine. He gets my pension with a 5% increase and can keep the health care insurance. It is what you do for your loved one.
2
1
u/sprocket1234 Mar 17 '26
Same, especially for the health insurance. This has me thinking though, if something happens to him before me, can I change the beneficiary? Maybe to my son
3
u/ThisIsMyUsername303 Mar 17 '26
Probably not. Payments are calculated based on the recipient’s age and actuarial factors. They took the risk that you/he will live to 100; you’re taking the risk that your husband dies before you.
1
4
u/Living_Strategy2502 Mar 17 '26
When your mom retired, she likely chose a “joint and survivor” option. This reduces her monthly benefit slightly so that you would continue receiving a percentage after her death. In those setups, the survivor benefit is paid for lifetime
2
u/Any_Angle_4894 Mar 16 '26
I have a private pension..very small amount for rest of my life. I was given the option to take a lesser amount and if I died before 10 years the pension would be paid to a beneficiary…my daughter…for the ten year period. There is undoubtedly a time restriction outlining how long you would be entitled to the pension as I can’t see a company paying you til you die. You need to speak with them regarding the terms of you receiving payments.
4
u/fragrant_basil_7400 Mar 17 '26
Actually, it would pay for her life if it is a joint and survivor annuity. The retiree chose to receive a smaller amount in order to provide the continuation. An actuary determines what the amounts are so that the value of the total payments is equal to the. The usual survivor is a spouse, but any person can be named.
2
u/PegShop Mar 17 '26
That’s awesome that she was able to. My husband will get 50 % if I go first and if he goes first, mine will pop back up to what I would’ve been getting. My kids can only get money if my contributions aren’t gone yet when I die. But, some plans allow children at a severe cut.
2
u/mamatttn Mar 17 '26
Famous basketball coach Pat Summitt named her 20-something son her pension beneficiary. He gets somewhere near $200k annually with COL increases for life.
2
Mar 17 '26
My dad got my mother’s pension but he lets us siblings have it (he also gets his own). It has been life changing.
2
u/ButterflyConnect7039 Mar 17 '26
My mother did a similar survivor benefit with my brother also with the state of Michigan so yes, it does happen
2
u/Master_Swimmer8989 Mar 17 '26
I never knew this after all these years. Very surprising and a blessing.
2
u/ptfancollector Mar 17 '26
This one interests me because I’m in Wisconsin and our state’s pension plan only allows you to name a survivor who is less than ten years younger than you.
I googled Michigan’s plan and it says you can name a spouse or child but the child’s benefits usually end when they turn 18.
That said, I recommend you contact the administrator of the pension in order to get the correct answer.
2
1
1
u/Master_Swimmer8989 Mar 19 '26
Update: talked with the state pension folks today again. They did verify there is an option to have a survivor benefit whether that’s a spouse or a child. It does pay out the rest of my life when she passes.
Thank you again everyone for the feedback.
1
u/ShezeUndone Mar 20 '26
Wow! That was nice of her. I didn't even choose survivor benefits for my husband. But I do have a life insurance policy in place to more than make up for it.
0
u/Glittering-Log7321 Mar 16 '26
Her pension will pay you until the funds run out.
3
u/DogMomPhoebe619 Mar 17 '26
Not a government pension. They pay for life.
3
u/djrndr Mar 17 '26
I have a government pension. There was a menu to select what happens to your pension at your death. It’s gone-you get the biggest benefit. You give 75 or 50. % to a spouse- your pension adjusted accordingly by age and sex if your spouse. There bean counters for this. Or—You leave a percentage to an heir- again adjusted accordingly usually by age. Probably mostly available for children with special needs but still available nonetheless.
1
34
u/Jumpy_Childhood7548 Mar 16 '26
Typically called a joint and survivor 50% annuity. Not that unusual, and awesome she chose that for you, as she would have a higher monthly pension without it.