Abstract
The Federal Employees Retirement System (FERS) provides survivor annuity benefits for em- ployees who forfeit a portion of their annuity as a premium. In this study, we construct a Monte Carlo simulation to describe the distributions and implied internal rates of return for FERS annuitants who elect a joint and survivor annuity. Our analysis suggests that the survivor benefit program is quite lucrative for most male retirees. In contrast, the program is less rewarding for female retirees, especially if younger than their spouse. For many female retirees, the program actually produces a negative return. Retirees and planners can use our results to make more informed annuity decisions.