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Classic Suze School: The Right Pension Option · Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

• 0:07
  Robert: September 17th, 2026. Welcome to the Women and Money podcast,
• 0:11
  Robert: as well as everyone smart enough to listen. Hi there, Robert,
• 0:14
  Robert: the producer here. Over this past weekend, I was at
• 0:17
  Robert: a baseball game and I struck up a conversation with
• 0:20
  Robert: the folks sitting next to me, and one of them
• 0:22
  Robert: mentioned that he was going to retire soon and was
• 0:25
  Robert: looking forward to being able to see more Red Sox games.
• 0:29
  Robert: And his son said, well, Dad, you need to figure
• 0:30
  Robert: your pension thing out first.
• 0:33
  Robert: We'll use that as a bit of inspiration for today's
• 0:36
  Robert: classic Suze School, which is all about selecting the right
• 0:39
  Robert: pension option.
• 0:42
  Robert: Enjoy.
• 0:46
  Suze: Now, KT mentioned that she loves teachers, and there are so,
• 0:52
  Suze: so many teachers out there. And today, one of the
• 0:58
  Suze: occupations that still get a pension when they retire happens
• 1:04
  Suze: to be teachers. Maybe you remember years and years ago
• 1:10
  Suze: when you worked for a corporation.
• 1:12
  Suze: After 20 or 30 years of working for them, and
• 1:15
  Suze: then you retired, they gave you a monthly pension, and
• 1:20
  Suze: that pension was a fabulous thing to have, and then
• 1:24
  Suze: that really was replaced by 401k plans. And so, therefore,
• 1:32
  Suze: many people out there don't have pensions anymore, 'cause all
• 1:36
  Suze: you have are your 401ks, however, many of you still do.
• 1:43
  Suze: When you do get a pension, like most teachers do,
• 1:49
  Suze: you have options for that pension.
• 1:53
  Suze: And the options are called joint and survivor benefits.
• 1:59
  Suze: And what that means, get out your Suze notebook, 'cause
• 2:03
  Suze: maybe you don't get a pension, but maybe one day
• 2:06
  Suze: your kid will, or your mother will, or your father,
• 2:10
  Suze: or whatever it may be, or just a friend, and
• 2:14
  Suze: they need advice. So, take out your Suze notebooks, 'cause
• 2:18
  Suze: this is really a good Suze school, just for all
• 2:22
  Suze: of you to know. All right.
• 2:25
  Suze: When you get a pension, they give you options as
• 2:28
  Suze: to how do you want to take that pension.
• 2:32
  Suze: And what that means isn't how do you want to
• 2:35
  Suze: take it weekly, biweekly, whatever it means, do you want
• 2:39
  Suze: to get your full pension amount, which means you will
• 2:44
  Suze: get X per month, but if you die, it's called
• 2:48
  Suze: a life only, if you die, your spouse will get
• 2:52
  Suze: absolutely nothing.
• 2:56
  Suze: Or do you want to take a 100% joint and
• 3:01
  Suze: survivor option where whatever you get upon your death, your
• 3:08
  Suze: spouse will get 100% of whatever you were getting and
• 3:13
  Suze: there's all different kinds of percentages you can get 100%
• 3:18
  Suze: joint and survivor benefit.
• 3:21
  Suze: Which again is where your spouse gets 100% of what
• 3:24
  Suze: you're getting, 75% joint and survivor benefit, which means your
• 3:30
  Suze: spouse would get only 75% of what you were getting, 50%
• 3:36
  Suze: joint and survivor benefit, which means your spouse would get
• 3:39
  Suze: only 50% of what you were getting.
• 3:43
  Suze: And 25%, which means your spouse would only get 25%
• 3:49
  Suze: of what you were getting.
• 3:52
  Suze: And obviously, in order to leave your spouse money after
• 3:58
  Suze: you have died, that's like an insurance policy.
• 4:03
  Suze: So what happens is whatever you are entitled to for
• 4:08
  Suze: your full pension, your life only pension, they will pay
• 4:12
  Suze: you that every month, and again, if you die, your
• 4:15
  Suze: spouse gets nothing. They reduce the amount of money that
• 4:20
  Suze: would be the life only option.
• 4:24
  Suze: Depending on, do you choose the 100%, 75%, 50%, or 25%
• 4:31
  Suze: joint and survivor option. That's how it works. Now, obviously,
• 4:38
  Suze: if you are not married, you want to take the
• 4:42
  Suze: life only option, 'cause remember, joint and survivor benefits are
• 4:49
  Suze: only for those who are married.
• 4:54
  Suze: And I will now read you the email that spurred
• 4:58
  Suze: this Suze School.
• 5:01
  Suze: Hello Suze and KT. Thank you both for everything you do.
• 5:06
  Suze: This question is about choosing or not choosing a joint
• 5:11
  Suze: and survivor option for my spouse when retiring. I am
• 5:16
  Suze: looking to retire next July 1st at age 66, and
• 5:21
  Suze: my wife is currently retired at age 67. Can you
• 5:27
  Suze: write these numbers down?
• 5:30
  Suze: 'Cause this is how you also think about Social Security
• 5:33
  Suze: and other things in life, all right? So, do this
• 5:37
  Suze: with me. Learn from this, pretend you are me, and
• 5:42
  Suze: a friend has asked you this question.
• 5:45
  Suze: How would you answer it? So, Suze School isn't just about,
• 5:50
  Suze: this is what you need to know.
• 5:52
  Suze: Money has to be an understanding of what you need,
• 5:58
  Suze: what you want, how you feel about it, all of that.
• 6:03
  Suze: So you have to understand how it works.
• 6:07
  Suze: So, 66, and my wife is 67, and currently retired.
• 6:14
  Suze: I am a teacher, so I will be entitled to
• 6:18
  Suze: a pension of about $2,595 a month.
• 6:25
  Suze: Now remember, write that down.
• 6:27
  Suze: I said a life only option. Your full pension in
• 6:32
  Suze: this case, his name is Steve, is $2,595 a month.
• 6:40
  Suze: That's what he would get. And if he took that,
• 6:43
  Suze: and by the way, the spouse always has to give
• 6:45
  Suze: permission to take anything less than 50%, just so you know,
• 6:51
  Suze: if he were to take that and the life only option.
• 6:54
  Suze: Upon his death, his spouse gets absolutely nothing.
• 7:00
  Suze: He goes on to say, I cannot decide whether to
• 7:04
  Suze: choose a joint and survivor option or not. The 100%
• 7:10
  Suze: joint and survivor option is $2,141. Write it down. The 75%
• 7:20
  Suze: joint and survivor option is $2,245.
• 7:26
  Suze: The 50% joint and survivor option is $2,361. Do you
• 7:34
  Suze: see how it's going up, because you're leaving less to
• 7:36
  Suze: your spouse upon your death? And the 25% joint and
• 7:41
  Suze: survivor option would be $2,481.
• 7:48
  Suze: He goes on to say my wife does not have
• 7:52
  Suze: a pension, only Social Security.
• 7:56
  Suze: We have about $1.2 million in IRAs. He did not
• 8:03
  Suze: say Roth IRAs. He said IRAs, which means taxable. When
• 8:09
  Suze: they go to take the money out, it will be taxable. OK.
• 8:15
  Suze: It's in equities and fixed income. They own their own
• 8:19
  Suze: home with no mortgage. Write it down, and they have
• 8:23
  Suze: no debt. He doesn't say how much the home is worth,
• 8:28
  Suze: and so we just have to assume it's a nice home.
• 8:32
  Suze: All right, he says, I feel we have enough for
• 8:39
  Suze: her to survive should I pass before her.
• 8:44
  Suze: Please give me your thoughts on this. I really do
• 8:47
  Suze: need your feedback to help decide the best option. Steven,
• 8:51
  Suze: I love that you wrote in because years ago, years
• 8:55
  Suze: ago when I was seeing clients, I also was the
• 9:00
  Suze: retirement planner for Pacific Gas and Electric, which was the
• 9:03
  Suze: utility company for Northern California.
• 9:06
  Suze: And at one point there they had 7,000 people retire
• 9:10
  Suze: and they all came to see me and they all
• 9:13
  Suze: had to choose which joint and survivor benefit they were
• 9:18
  Suze: going to choose. So I went through this and went
• 9:22
  Suze: through this with thousands of people over my career. So
• 9:26
  Suze: I can tell you hands down, that I want you,
• 9:31
  Suze: without a shadow of a doubt, to choose the 100%
• 9:35
  Suze: joint and survivor option. Now, I want all of you
• 9:40
  Suze: to listen to me.
• 9:43
  Suze: Obviously, if Steven chooses the 100% joint and survivor option,
• 9:51
  Suze: that means all Stephen is going to get is $2,141
• 9:57
  Suze: a month. They will have reduced his full pension by
• 10:01
  Suze: $454 per month. I know that in this case that
• 10:07
  Suze: seems like a lot of money.
• 10:11
  Suze: Why do they reduce it by so much? They reduce
• 10:15
  Suze: it because obviously Stephen through his work is in essence,
• 10:22
  Suze: the company is buying a life insurance policy, or that's
• 10:26
  Suze: how much it will cost them to insure the fact
• 10:29
  Suze: that they can provide Stephen's spouse with 100% every month
• 10:35
  Suze: for the rest of her life.
• 10:38
  Suze: $2,141. Now, just write those numbers down.
• 10:45
  Suze: When I was doing planning for Pacific Gas and Electric,
• 10:48
  Suze: a lot of people said to me the following, and
• 10:51
  Suze: you are never, ever to do this.
• 10:55
  Suze: They said, All right, Suze, we're going to take the
• 10:58
  Suze: $2,595 the full pension, and we're going to buy a
• 11:05
  Suze: 20 year level term policy on me. So if I die,
• 11:11
  Suze: my spouse will be OK. Are you kidding me?
• 11:16
  Suze: This isn't about 20 years from now, and 20 years
• 11:19
  Suze: from now, Stephen may be what, 86. He could live
• 11:23
  Suze: easily into his 90s if he's healthy, and at the
• 11:26
  Suze: time that if his spouse is still alive, that she
• 11:28
  Suze: needs the money the most. A 20-year level term policy
• 11:32
  Suze: goes away.
• 11:34
  Suze: And the plan usually is, they will take the difference
• 11:38
  Suze: from the $2,595 and use it to buy a term
• 11:42
  Suze: life insurance policy to protect the spouse.
• 11:47
  Suze: Now, you would have to buy at least a $700,000
• 11:53
  Suze: life insurance policy to protect the spouse in this situation. Why?
• 12:01
  Suze: Cause $700,000 of insurance, Stephen dies, the spouse, she would
• 12:07
  Suze: invest that $700,000 and let's just say she could get 4%
• 12:11
  Suze: on that.
• 12:12
  Suze: That's about $28,000 a year. Obviously, it will be taxable,
• 12:17
  Suze: not the $700,000 but the income from it. So after
• 12:20
  Suze: taxes and everything, that'll probably leave her about $25,000 or
• 12:24
  Suze: $26,000 a year to live on, which is what she
• 12:28
  Suze: would be getting with the 100% joint and survivor option.
• 12:33
  Suze: 'Cause remember, $2141 a month is $25,692 a year. Are
• 12:41
  Suze: you all following me?
• 12:43
  Suze: However, you can't do it that way. If you want
• 12:48
  Suze: to replace the $700,000 life insurance policy to guarantee your
• 12:55
  Suze: spouse will always be OK, a $700,000 life insurance policy
• 13:01
  Suze: is not just going to be $4,000 or $5,000 a year.
• 13:06
  Suze: If it's a whole life policy, it is not going
• 13:10
  Suze: to be that cheap.
• 13:12
  Suze: So, you are far better off doing it where? Doing it
• 13:16
  Suze: through the place of employment and taking the 100% joint
• 13:21
  Suze: and survivor option, cause remember, if you take the full option,
• 13:27
  Suze: the life only, which in this case is 2,595, $454
• 13:35
  Suze: more than the 100% joint and survivor option. That $454
• 13:43
  Suze: will be taxable to you, Stephen.
• 13:46
  Suze: So you're not going to really have that much more,
• 13:49
  Suze: believe it or not.
• 13:51
  Suze: That's number one. Why do I not want you to
• 13:54
  Suze: take the 75% or the 50% or the 25%? I
• 14:00
  Suze: have done this enough now. When one spouse survives the other,
• 14:05
  Suze: they will lose one Social Security check number one and
• 14:11
  Suze: things can happen, and every single penny matters. You, Stephen,
• 14:18
  Suze: think you have a whole lot of money cause you
• 14:20
  Suze: own your home outright. You have $1.2 million in an
• 14:25
  Suze: IRA right now. You have it right now.
• 14:29
  Suze: What happens if it goes down? What happens if you
• 14:32
  Suze: didn't protect it? What if it was a few years ago,
• 14:35
  Suze: a year or so ago, you died.
• 14:38
  Suze: And now your bond portfolio, cause you thought you were
• 14:41
  Suze: gonna protect all this money, and you bought mutual funds
• 14:43
  Suze: with bonds in them, and it went down 30%.
• 14:48
  Suze: Or what happens if the stock market crashes or interest
• 14:51
  Suze: rates go down. That $1.2 million doesn't mean unless you
• 14:57
  Suze: put it all in treasuries you keep it all safe
• 15:00
  Suze: and sound.
• 15:02
  Suze: Isn't really that much money, if you think about it.
• 15:08
  Suze: 'Cause remember, starting at the age of 73, you're under
• 15:13
  Suze: required minimum distributions, and that is just 7 years from now, Stephen.
• 15:18
  Suze: And therefore, you have to start taking money out of
• 15:22
  Suze: the 1.2 million, and probably after taxes and everything, and
• 15:26
  Suze: it will end up just being spent because of inflation
• 15:29
  Suze: and everything like that.
• 15:32
  Suze: So that's number one. Number two, your home.
• 15:37
  Suze: When a spouse, a woman loses her husband or her wife.
• 15:46
  Suze: Normally she does not want to sell the house that
• 15:50
  Suze: they were living in at that time.
• 15:54
  Suze: She wants to stay in there. She doesn't want to
• 15:57
  Suze: give away your clothes. She wants the memories. It can
• 16:00
  Suze: take two years before she sells it. Now, I have
• 16:05
  Suze: been doing this long enough, dealing with female spouses, male
• 16:11
  Suze: spouses that have survived their partners, and I can tell you,
• 16:16
  Suze: women have more of an attachment to the house and
• 16:22
  Suze: things like that than usually the men do. It's just
• 16:27
  Suze: something that I have noticed over the 40 years that
• 16:31
  Suze: I have been dealing with things like this.
• 16:35
  Suze: But regardless, you cannot assume that a spouse right after
• 16:42
  Suze: you've died, everybody, is just gonna be able to sell
• 16:45
  Suze: the house. And what if it was 2007, 2008, when
• 16:49
  Suze: real estate had crashed.
• 16:52
  Suze: And the house that was worth $700,000 in Tampa, Florida
• 16:56
  Suze: was worth only $100,000 now.
• 17:00
  Suze: What if that? The truth of the matter is, you're
• 17:03
  Suze: not gonna buy insurance because insurance is too expensive, whatever
• 17:07
  Suze: it may be. So you've taken the $2,595, you didn't
• 17:11
  Suze: buy insurance.
• 17:14
  Suze: And you die the next day afterwards. Your spouse now
• 17:18
  Suze: could easily live another 30 years without that income, without
• 17:24
  Suze: that income at all.
• 17:26
  Suze: You're not even old enough to be claiming Social Security
• 17:29
  Suze: at that point, because you should absolutely be waiting till
• 17:32
  Suze: you're 70 to do so. But let's just say you die.
• 17:37
  Suze: And now your spouse gets to take your full Social Security.
• 17:42
  Suze: Your full Social Security doesn't really start to be the
• 17:46
  Suze: full primary amount till you're 67. I know I'm driving
• 17:49
  Suze: all of you crazy right now.
• 17:51
  Suze: But these are the things that can happen. So how
• 17:55
  Suze: is she going to support herself? She's going to lose
• 17:58
  Suze: her Social Security and probably take over yours if yours
• 18:02
  Suze: is higher than hers. But now she has lost the
• 18:06
  Suze: pension that you two were supposed to be enjoying and
• 18:09
  Suze: her Social Security. Are you kidding me?
• 18:15
  Suze: So here is the real question. If you can't do
• 18:21
  Suze: without $454 a month right now, my dear Stephen.
• 18:28
  Suze: Are you asking her to do without your total $2,595
• 18:36
  Suze: a month. Is that what you are asking her to do?
• 18:41
  Suze: You absolutely can make it, both of you with what
• 18:45
  Suze: you have on $2,141 a month as a pension. You
• 18:53
  Suze: can do that.
• 18:55
  Suze: But don't ask her to do so. Do you understand
• 19:00
  Suze: what I'm saying?
• 19:02
  Suze: Are there exceptions to what I just said? Of course
• 19:06
  Suze: there are. If your spouse is seriously ill and she
• 19:11
  Suze: is expected to die, then possibly you could do it
• 19:15
  Suze: and take out a term insurance policy and protect her
• 19:19
  Suze: just in case something happened to you like an accident
• 19:22
  Suze: before she passed.
• 19:25
  Suze: Or you can all ask your companies, do they have
• 19:30
  Suze: something called a pop-up option?
• 19:35
  Suze: And a pop-up option is this. It is where you
• 19:41
  Suze: take the 100% joint and survivor option and if your
• 19:46
  Suze: spouse dies before you, you get to pop up to
• 19:51
  Suze: the full amount, and in this case, the $2,595.
• 19:56
  Suze: Stephen, ask if they have a pop-up option, because chances
• 20:02
  Suze: are the STRS system or the PR system, which you
• 20:07
  Suze: are a part of as a teacher. The last I
• 20:12
  Suze: knew they had a pop up option. If they do that,
• 20:17
  Suze: then you take the 100% joint and survivor benefit with
• 20:21
  Suze: the pop up option.
• 20:25
  Suze: Just know, with the pop-up option, it will cost you
• 20:29
  Suze: a little bit, but not as much as a plain 100%
• 20:34
  Suze: joint and survivor benefit.
• 20:38
  Suze: So those are things you need to remember.
• 20:42
  Suze: The bottom line is this, if your spouse is totally healthy,
• 20:49
  Suze: if they don't offer the pop-up option.
• 20:53
  Suze: I don't really care how much money you have because
• 20:56
  Suze: the truth of the matter is you just never know
• 20:58
  Suze: what can happen in life. I have found over all
• 21:02
  Suze: the years I have been doing this that truthfully the
• 21:06
  Suze: only way to go is the 100% joint and survivor option.
• 21:13
  Suze: With the school district or company that you are working for. Now,
• 21:18
  Suze: I just want to say one other thing. If I
• 21:21
  Suze: were in your situation, and I had the amount of
• 21:25
  Suze: money that I have today, and KT had the amount
• 21:30
  Suze: of money that she has today, which is multi-millions of
• 21:33
  Suze: dollars in her name.
• 21:35
  Suze: And I was about to get a pension, I would
• 21:39
  Suze: still take the 100% joint and survivor option. I would never, ever,
• 21:46
  Suze: ever take a life only option.
• 21:51
  Suze: All right, now listen to me, everybody. Every corporation, school system,
• 21:55
  Suze: whatever it may be, they have different variations of pension options,
• 22:01
  Suze: but this Suze School today gives you a good overview
• 22:05
  Suze: of things that you should think about when choosing which
• 22:10
  Suze: option you want.
• 22:13
  Suze: So, I hope this wasn't too complicated for you. But
• 22:17
  Suze: I know it's not, because I know that you're all
• 22:19
  Suze: getting smarter and smarter, but these are the ways that
• 22:24
  Suze: I want to start training your brain to think and
• 22:28
  Suze: to guide you into things that can happen.
• 22:32
  Suze: And I know $1.2 million sounds like a lot of money.
• 22:36
  Suze: It would have been a whole lot more, by the way, Stephen,
• 22:38
  Suze: if you had had it in a Roth IRA where
• 22:42
  Suze: no taxes would be due, no required minimum distributions, no
• 22:47
  Suze: taxes to her on this money upon your death. Then
• 22:52
  Suze: maybe it would be different, but that's not how it is.
• 22:58
  Suze: So before I sign off today, wherever I go, come on,
• 23:02
  Suze: say it with me today, wherever I go, I will
• 23:05
  Suze: create a more peaceful, joyful, and loving world, and if
• 23:10
  Suze: you do that, I promise you you will be unstoppable.
• 23:16
  Suze: Bye bye.