If you are married, part of creating a retirement plan involves planning around the unfortunate passing of your spouse. When that happens, it is often the surviving spouse’s responsibility to manage the household’s finances on their own as well as manage any retirement or pension benefits.
The passing of a loved one can be an extremely emotional time on its own. The last thing you want on your plate is figuring out the details of survivor benefits at a time when you may need that income the most.
This blog explains the AT&T pension survivor benefits, and other survivor benefits you could receive so that you and your spouse have confidence and peace of mind for the future.
Key takeaways:
If you are an AT&T employee, upon your death, your spouse is eligible for an AT&T pension survivor benefit. In that case, the surviving spouse does have a few options for how they would like to receive their benefits.
If an employee passes away before retiring, a spouse automatically receives 50% of the monthly annuity or can choose the lump-sum equivalent. This option is only available to spouses. For more details on a lump sum versus an annuity payout, watch this video on the differences between a lump sum versus annuity payout.
There are multiple survivor options to choose from for the monthly pension, but all are only available for a qualified spouse. Additionally, union employees also have the choice to take a full lump-sum pension payout instead of the monthly annuity. Meanwhile, management employees generally have the choice to take a partial lump-sum pension with a residual monthly pension.
The chart below shows an example of these options based on a $2,000 Single Life Annuity Pension:
In addition to your AT&T pension, the benefits that you have earned and accumulated, such as life insurance and your 401(k), can also be passed on to a beneficiary in the event of your death – as long as your surviving spouse is listed as the beneficiary of your AT&T 401(k) account. While not technically a survivor benefit, it is still a potentially sizable amount of money owed to your spouse.
You can, however, name as many people as you want and add or remove names at any time, as long as the allocated percentages add up to 100%.
Life changes – sometimes unexpectedly or abruptly. For this reason, it is important that you keep your beneficiary information current to reflect your wishes. If something happens to you and your beneficiary information is outdated or missing, it can create a painful and costly situation for the people you're trying to protect. In order for funds to be allocated appropriately, it would likely be forced into probate, which can be both lengthy and expensive.
Even if your wishes change, AT&T is required to honor the written designation upon your death, no matter how old the information. The designations listed on your beneficiary form are the final word – they trump your will.
Your current beneficiary designations can be viewed on the Fidelity Benefits Center website: www.netbenefits.com. Here, you can find and edit list of the individuals you named as beneficiaries for any accumulated balances of your pension, life insurance and 401(k) plan.
Just like your AT&T 401(k), your AT&T life insurance benefits can have designated beneficiaries.
While employed, you may be eligible for basic life insurance coverage through AT&T. For most employees, basic life insurance coverage is equal to one year of compensation. If you meet the Modified Rule of 75, you are eligible for a basic life insurance benefit after retirement. As a retiree, the amount of your basic life insurance benefit depends on your age, employment classification and compensation.
If you need additional coverage, you may purchase supplemental life insurance to meet your needs. The supplemental life insurance plan may also be available to you in retirement.
Buying supplemental coverage through AT&T’s group plan could be a cost-effective way to get access to additional coverage. The cost and amount of coverage you are eligible for under the supplemental plan will vary based on your employment classification, compensation and years of service, among other factors. In retirement, your age will also affect your cost and eligibility.
Although Social Security is entirely separate from your AT&T benefits, it will be a major part of your retirement plan. Therefore, it’s a good idea to understand the nuances of Social Security survivor benefits work as well.
Read our blog post here for What to Know About Social Security Spousal, Survivor & Divorce Benefits.
If you are married, the retirement benefits that you accumulate over your career may not just benefit you.
Understanding how your AT&T retirement benefits will support your spouse, even in the event of your passing, is important and can bring peace of mind knowing how your finances will be covered when you are no longer here.
If you’d like a personalized strategy on how your AT&T benefits fit within your overall financial plan, get in touch with one of our advisers who specialize in AT&T retirement benefits.