Expert's View

This is the time of year when retirements start to crest. If you are one of those getting ready to jump ship and are married, you’ll have a big decision to make: Should you elect a survivor benefit for your spouse?

The downside of electing a survivor annuity is that it reduces the amount of your own annuity. The amount of the reduction depends on whether you elect a full annuity or a reduced one.


If you are a CSRS employee, you may elect any amount from $1 per year up to 55 percent of your base annuity. (Why would anyone want to provide only a minimal survivor benefit? Because a survivor benefit is a precondition for your spouse being eligible to continue FEHB coverage should you die first–unless your spouse is separately eligible through his or her own federal employment.)

If you are a FERS employee, you only have two choices: 50 percent of your base annuity or 25 percent.

The reduction in your own annuity for a CSRS full survivor benefit amounts to around 10 percent; under FERS it’s exactly 10 percent. A reduced survivor annuity will cost you proportionately less under CSRS, depending on the amount you elect; under FERS, the 25 percent option results in a 5 percent reduction to your annuity.

That reduction is made from your base annuity, i.e., the amount to which you are entitled before any deductions are made for such things as health benefits premiums, taxes, etc.

The advantage of electing a survivor annuity is this. With one exception, it will provide an income to your spouse as long as he or she lives. Here’s the exception. The survivor annuity will end if he or she remarries before age 55.

That income your survivor spouse receives will come from your base annuity, increased by all the cost-of-living-allowances (COLAs) you received since you retired. In addition, the survivor annuity would be increased by all future COLAs.

While it may be tempting to turn down the offer of a survivor annuity and either invest the extra money or purchase an insurance policy to make up the difference, very few retiring employees do that. That’s because the government’s deal is hard to beat. Further, if you want to elect a reduced survivor annuity (or none at all), you may only do that with the written consent of your spouse.


Note: If you are divorced and a court has given a survivor annuity to your former spouse, you may still elect a survivor annuity for your current spouse. Doing this can protect him or her if your former spouse loses entitlement to that annuity, for example, by remarrying before age 55.