Lyle and Melissa Murray plan to retire when Lyle turns age sixty-five, even though his normal retirement age is age sixty-seven. Lyle has worked at the same firm for over thirty years. Melissa has worked only occasional temporary jobs over her lifetime. The Murrays have a few questions about Lyles defined benefit pension benefit and expected Social Security benefits. Use the following information to answer their questions:

Lyle must choose from the following four defined benefit plan distribution options:

$3,000 for life with no survivor benefit

$2,700 for life with a 50 percent survivor benefit

$2,350 for life with a 67 percent survivor benefit

$2,000 for life with a 100 percent survivor benefit

a.Assuming (a) Lyle lives ten years after retiring, (b) Melissa lives an additional ten years beyond Lyles passing, and (c) the pension has no cost of living adjustment, which of the four alternatives should they choose in order to maximize their combined lifetime benefit?

b.What benefit alternative should they choose if Lyle lives another twenty years beyond retirement and Melissa lives an additional ten years beyond that?

c.If Lyles Social Security retirement benefit at age sixty-seven is $2,300 per month, how much will they receive in yearly benefits if they both claim benefits when Lyle turns age sixty-five?