When we take an income in retirement most plans allow for a selection of income options. Some pay more, some less, depending on what the issuing company has been instructed to do with the money invested when the annuitant dies. If the company is to keep the outstanding balance (single life plan) the income paid will be higher. If the company must continue payments to a survivor (joint plan) the income you receive while both of you are alive will be less.

Of course the best option is to take the higher income so that you and your spouse can enjoy a happier retirement together, but what if your spouse doesn't have a significant income of their own and cannot survive if the pension dies with you?

Without proper planning the only option you have is to take a joint plan and receive a reduced income. How would such a reduction affect your retirement plans? For those with greater sums to invest at retirement the loss of income could be much higher since most annuity and RRIF guarantees mean a percentage reduction in income.

That's where Pension Maximization comes in.