Key Decisions to Consider for Your Retirement Application

When applying for retirement as a federal employee, you’ll face several important choices that can impact your financial future and your spouse’s well-being. Decisions about survivor benefits, FEGLI coverage, and FEHB continuation are especially critical, as many of these choices are irreversible. It’s essential to understand the implications of each option before finalizing your application.

Choosing a Survivor Benefit Option

Your decision about survivor benefits will affect both your FERS annuity and your spouse’s financial security after your passing. If you opt for less than the full survivor benefit, your spouse must provide signed, notarized consent.

• 50% Survivor Benefit: This option reduces your FERS annuity by 10%, enabling your spouse to receive 50% of your pension if you pass away.
  • Example: With a $3,000 monthly gross FERS annuity, your benefit will be reduced to $2,700. After your passing, your spouse will receive $1,500 per month.
• 25% Survivor Benefit: A less expensive option, this reduces your annuity by 5%, allowing your spouse to receive 25% of your pension.
  • Example: A $3,000 gross annuity would be reduced to $2,850, and your spouse would receive $750 per month after your passing.
• 0% Survivor Benefit: This option involves no cost, but your spouse will lose eligibility for FEHB coverage upon your death, leaving them without federal health insurance.

Continuing FEHB Coverage in Retirement

One of the significant advantages of keeping your Federal Employees Health Benefits (FEHB) in retirement is the continued cost-sharing by the government. As a retiree, the federal government typically covers up to 75% of your FEHB premium, leaving you responsible for about 30%. However, if you decide to drop FEHB coverage as a retiree, you cannot re-enroll later, so it’s a critical decision to make carefully.

Evaluating FEGLI Coverage Post-Retirement

Federal Employees Group Life Insurance (FEGLI) provides valuable coverage during your working years, with the government covering 33% of the premium costs. However, as you age, FEGLI premiums—especially for optional coverage like Options A, B, and C—can become prohibitively expensive. At this stage, exploring more affordable life insurance options through private carriers may be a better choice for some retirees.

Start Planning Early

Survivor benefits, FEHB continuation, and FEGLI coverage are just three of the crucial decisions you’ll face during your retirement process. Don’t leave these choices to the last minute. Partner with an FRC® trained advisor trained advisor to fully understand your benefits and ensure you’re well-prepared for a financially secure retirement.