And Now It's Time to Retire 206 If pension max provides you with more income as a couple, continue the calculation to see whether it protects your spouse. Have You Left a Large Enough Annuity for Your Spouse? 12 . 13 . 14 . 15 . 16 . 17 . 18 . **** For Your spouse's life expectancy, based on his or her age when you retire. **** The number comes from an IRS table and is called the Expected Return Multiple (IRS Publication 590). The portion of the spouse's annuity income that will be excluded from income taxes. This is the exclusion ratio. ***** Carry it to three decimal places. Subtract the exclusion ratio from 1.000. Enter the monthly income you targeted, from Line 7. Multiply Line 15 by Line 14. This tells you how much of the spouse's annuity income is subject to tax. ________ ________ 0._______ $_______ $_______ Subtract income taxes ** from the spouse's annuity income, and enter that income after tax. $_______ Enter the actual amount of net spousal income you need to protect (Line 6). $_______ safety, refigure for 5, 10, and 20 years ahead. Each year the spouse lives, his life expectancy improves. ***** To get the exclusion ratio, multiply the spouse's monthly annuity income by 12. Multiply the result by the Expected Return Multiple (Line 12). Divide the result into the proceeds of the life insurance policy. ** Federal, state, and local. Do the exact calculation. Don't just estimate the bracket. If Line 18 is larger than Line 17, you need more insurance. Redo the calculation, using a larger insurance amount. If Line 18 is less than Line 17, you could buy a smaller insurance policy. If you start pension maximization earlier than retirement, you'll also need a "present-value" analysis.