If you spent a career in an Arizona school, city office, or state agency, your ASRS pension may be the steadiest income you will ever have. The paperwork that sets it up is easy to rush. The choice inside that paperwork can shape your household budget for decades.
Most of that weight sits on one question. How do you want the pension paid?
The Payout Choices on the Table
ASRS groups its payout options into three families. Each one trades some monthly income for a different kind of protection.
- Straight Life Annuity. This pays the highest monthly amount for your lifetime. Nothing continues to a survivor after you die.
- Term Certain for 5, 10, or 15 years. Your check is smaller during the term, and a beneficiary can receive payments if you die before it ends. Once the term runs out, your check moves to the Straight Life amount.
- Joint and Survivor at 100, 66 2/3, or 50 percent. Your check is smaller for life. When you die, your beneficiary keeps receiving a benefit for the rest of their life.
ASRS says these choices are made at retirement and, in most cases, can’t be undone. That is why this decision deserves more than a quick checkbox.
The Rule Married Members Should Know Early
Marriage changes the starting point. ASRS requires married members to name their spouse as primary beneficiary for at least 50 percent and to elect a Joint and Survivor option.
You can still pick Straight Life or a Term Certain option. Your spouse has to waive their rights first, using the ASRS Spousal Consent form. It helps to talk this through before the forms arrive.
Questions Worth Answering Together
The right option depends less on math and more on your household. Sit down with your spouse or partner and work through a few questions.
- Would your spouse have enough income without your pension check?
- Does your spouse have a pension or Social Security of their own?
- How far apart are your ages?
- What savings could cover a gap if the check stopped?
If you want a local take on eligibility dates and the rules for working after you retire, here is a guide on how Phoenix public workers weigh their ASRS pension options.
How the Percentages Trade Off
The Joint and Survivor percentage works like a dial, not a switch. At 100 percent, your survivor keeps the full amount you were receiving, so your own check starts lower. At 50 percent, your check starts higher, but your survivor’s income drops by half when you die. The 66 2/3 option sits between the two.
Term Certain fits a different goal. It can leave payments to someone for a set stretch of time, such as an adult child, without lowering your check for your whole retirement. There is no setting that is right for everyone. It comes down to the income your survivor would need.
Second Chances Are Limited
Some retirees assume they can switch options later if life changes. ASRS leaves very little room here. Retirees with a Joint and Survivor option and a retirement date on or after July 1, 2008 can rescind back to Straight Life only once. It must be due to the death of, or divorce from, the primary contingent annuitant.
Changes are not retroactive, either. A divorce or a loss years from now will not give back the income you passed up in the meantime.
Get Your Numbers Before You Decide
You don’t have to guess at the dollar amounts. ASRS members can log into their secure myASRS account and create personalized estimates for each payout option. Run the Straight Life amount, then each Joint and Survivor percentage. Write the monthly difference next to each one, and bring the printouts to the kitchen table.
Then read the ASRS page on retirement annuity options so you know how each option behaves after your death. Seeing the trade in real dollars makes the talk at home much easier.
Your pension choice comes down to one signature. Give it the same care you gave the career that earned it.