Why Some Government Retirees Regret Not Choosing the Survivor Annuity

richard jayne
July 22, 2025

Key Takeaways

Choosing the survivor annuity option during retirement can significantly impact your spouse or loved one’s financial future, especially if you pass away first.
Some retirees regret skipping this option due to the long-term consequences, including loss of continued income for their spouse and reduced financial stability for their household.

Understanding the Survivor Annuity Option

When you retire under the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS), you’re given the option to elect a survivor annuity. This decision allows your spouse or other eligible person to continue receiving a portion of your annuity after your death.

The survivor annuity isn’t automatic—you must choose it at retirement. Your annuity amount is reduced to provide this benefit, but in return, your designated survivor will receive monthly payments for life if you pass away first.

Available Election Types

For most government retirees, there are three standard choices:

Full Survivor Annuity: Your spouse receives up to 50% of your unreduced annuity.
Partial Survivor Annuity: Your spouse receives 25% of your unreduced annuity.
No Survivor Annuity: You receive your full annuity, but your spouse gets nothing after your death.

Each option comes with specific financial implications, and once elected, these choices can be difficult to reverse.

What Happens if You Don’t Elect the Survivor Annuity?

Not choosing a survivor annuity might seem like a smart financial move in the short term. After all, you get a higher monthly annuity payment. However, this decision has long-lasting effects if your spouse outlives you.

Without the survivor annuity:

Your annuity payments stop upon your death.
Your spouse loses access to FEHB (Federal Employees Health Benefits) unless they qualify for it independently.
Any future financial planning must rely on other savings or insurance, which may not be enough.

In 2025, many retirees face rising healthcare costs and inflation, making a reliable income stream even more essential for surviving spouses.

Why Some Retirees Regret Their Decision

Many retirees who decline the survivor annuity later find that their short-term gain results in long-term loss. The regret often surfaces when their spouse is left financially vulnerable.

Common regrets include:

Loss of FEHB coverage: For many families, this becomes the biggest issue. If your spouse isn’t covered under a survivor annuity, they can’t continue FEHB coverage after your death.
Financial insecurity: Without a steady annuity payment, your spouse may face a sharp drop in household income.
Cost of replacement options: Trying to replicate a survivor annuity with life insurance or other savings is often more expensive and less reliable.

Considerations When Making Your Choice

You’ll want to take several factors into account when deciding whether to elect a survivor annuity. Here are some key points to think about:

1. Age and Health

If you’re significantly older or have known health risks, your spouse may be much more likely to outlive you.
Longevity trends suggest women, in particular, tend to live longer than men.

2. Financial Dependencies

If your spouse depends on your annuity for monthly expenses, denying the survivor annuity could create future hardship.
If you share a mortgage, have debts, or rely on your annuity for joint living expenses, this option should not be taken lightly.

3. Other Retirement Income

Do you or your spouse have other pension streams, investments, or Social Security benefits that would be sufficient?
The survivor annuity can provide crucial balance if other income sources are inconsistent or smaller.

4. Life Insurance as an Alternative

Some retirees consider replacing the survivor annuity with a life insurance policy. While this can work in theory, in practice:

Policies may be expensive, especially if purchased at an older age.
There’s no guarantee the policy will remain active or sufficient at the time of death.
Insurance may not provide the same long-term, inflation-adjusted income as a survivor annuity.

Rules You Can’t Ignore

Retirement rules around survivor annuities can be strict. In 2025, the Office of Personnel Management (OPM) still enforces requirements for married retirees:

You must get your spouse’s notarized consent if you choose anything less than a full survivor annuity.
If your spouse later passes away before you, you can’t reallocate the survivor benefit to someone else.
Once elected, you typically can’t increase the benefit later unless under specific qualifying events.

Understanding these restrictions is essential for making a well-informed choice.

Survivor Annuity and FEHB: The Critical Connection

The survivor annuity decision affects more than just income—it also determines access to federal health insurance. As of 2025, continued FEHB coverage for a spouse depends on whether you elected a survivor annuity at retirement.

If you die without electing this benefit:

Your spouse will lose FEHB coverage unless they qualify independently.
Re-enrollment is not allowed after coverage ends.

This loss can result in thousands of dollars annually in additional healthcare expenses. For many retirees, this regret hits harder than any reduction in annuity value.

What You Should Do Before Making a Final Decision

Making your survivor annuity choice should never be rushed. You need to review your entire financial picture and think ahead to different scenarios.

Here’s what to do before retirement:

Schedule a retirement counseling session with your HR office.
Get a benefits estimate with and without the survivor annuity.
Project your spouse’s financial needs if they outlive you by 10, 20, or 30 years.
Evaluate life insurance options alongside the annuity.
Talk to a licensed agent for professional help comparing your options.

You Can’t Predict the Future—But You Can Prepare for It

Many retirees who opt out of the survivor annuity feel confident at the time. But over time, they realize they didn’t anticipate how much their spouse depended on their benefits.

Regret sets in when:

A spouse is left without medical coverage.
Retirement savings deplete too fast.
Inflation erodes fixed income sources.

In 2025, economic uncertainty, rising medical costs, and longer life expectancies all reinforce the importance of careful survivor planning.

Think Long-Term, Not Just Short-Term

The survivor annuity may reduce your retirement income slightly, but it often provides a level of protection that’s hard to replace elsewhere. Instead of focusing only on your initial monthly payout, think of how your spouse will manage if you’re no longer there.

The peace of mind you gain by ensuring your loved one is covered—financially and medically—can outweigh the cost of the annuity reduction.

Planning for Your Spouse’s Security Starts Now

If you’re nearing retirement or reviewing your options during a benefits review, don’t underestimate the impact of this decision. It’s not just about numbers on a page—it’s about financial dignity for your spouse if they’re left behind.

Make sure you: