Business and Personal Finance Dictionary

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• PENSION MAXIMIZATION
  
  Pension maximization is a strategy that involves selecting a single life annuity for income paid from your retirement plan, rather than a joint and sum annuity, and then using some of your annuity income to buy a life insurance policy on your life. At your death, the annuity income ends and the life insurance death benefit is available to provide income for your surviving spouse. While you receive more income from a single life annuity than from a joint and survivor annuity, there may be potential drawbacks of pension max, as this approach is sometimes called. These include the cost of insurance, sales charges, and an increased risk of your spouse's running out of income.
  
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