Pensions are also called defined benefit plans. With their help your employer promises to give you a certain monthly income, or in some cases, a lump-sum check in place of a monthly income, starting at retirement.

The amount of money you receive is calculated by a formula that considers your emolument, the number of years you’ve worked for the company, and some other factors. The formula is different at every company. That’s why check with your employer to learn how much you can expect to receive at age 60, or 65, based on your employer’s calculations.

Most people entitled to a pension at retirement have several options regarding how to collect the benefit.

The most common of them:

- single life annuity – it gives you a monthly income for life, but it stops upon your death.

- joint and survivor annuity – it provides you with a smaller monthly income, but it  continues as long as either you or your spouse is alive.

Which would you choose?

The overwhelming majority of people choose the joint and survivor option. Weight everything and make your choice.