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Retirement Planning


Whether you are close to federal employee retirement or just starting out in your career, this is the place to share ideas with your federal colleagues on creating a secure financial foundation.


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TRW  
#1 Posted : Friday, May 21, 2021 9:27:27 AM(UTC)

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I plan on retiring in January 2022. I took the late career FERS retirement class last December and learned a lot. On the topic of the survivor benefit program the bottom line seemed to be that unless you knew you were going to die soon after retirement it was a bad deal since you were losing 5-10% of your pay with no guarantee of your spouse outliving you to ever collect anything. If your spouse dies before you, all the money was wasted unlike an insurance policy that might have some cash value built up in it that could be passed on to an heir.

My father is a real world example of this. He retired as a GS-13 in 1993 and at the time his spouse elected to participate in the SBP. She passed away in February 2020 which meant he paid 10% of his retirement pay every month for 27 years and now nobody has anything to show for it except the coffers of the SBP. They would have been better taking that 10% and putting it into a whole life policy.

My brother, a retired CSRS employee himself, ensured that OPM was notified of her death and had the 10% restored to his monthly retirement pay.

Unfortunately, I'm coming up to a decision point here in a few weeks myself where my wife and I have to have a discussion about what she is going to elect to do.

Obviously, I don't want to lose any of my retired pay but I also understand it's not up to me and the final decision is hers.

Anyone with any advice to share...it will be appreciated.

Edited by user Friday, May 21, 2021 9:28:28 AM(UTC)  | Reason: Not specified

FriendlyNeighborhoodMailman  
#2 Posted : Tuesday, May 25, 2021 5:19:36 AM(UTC)
FriendlyNeighborhoodMailman

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I believe a retiring employee must elect at least the 5% option in order for their spouse to continue to be on their health plan in retirement and after the employee's death, so if that is an issue that would be a major decision.
TRW  
#3 Posted : Wednesday, May 26, 2021 3:04:44 PM(UTC)

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That wouldn’t apply to my situation. I’m retired military and my wife and I both get our health benefits through TRICARE.
frankgonzalez  
#4 Posted : Thursday, May 27, 2021 3:33:38 AM(UTC)
frankgonzalez

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Originally Posted by: TRW Go to Quoted Post
That wouldn’t apply to my situation. I’m retired military and my wife and I both get our health benefits through TRICARE.
If you are married when you retire from the military, the same calculation applies. Term Life Insurance is also a gamble...they bet you will live longer than the cost of the policy payout, you bet you won't. Whole Life builds a cash value, but you pay more for less coverage. And as you age, the costs go up. The Survivor Benefit doesn't.

The reason for both is to provide your spouse an income if you pass before them for the rest of their life. Social Security isn't enough to live on these days, the annuities provided in the election means your spouse has something. If you both pass close in time to each other...then yes, it may be a net loss to you. If you pass a few years after retiring and your spouse lives another 10-30 years more...then your bet paid off.

You should have voted Cthulu...the greatest of all Evils
jumpshelley  
#5 Posted : Saturday, June 12, 2021 7:16:34 AM(UTC)

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I opted times 5 for myself and should get the 20g, if the MR goes first. I listed my daughter for the basic life. I appointed full time august last year. I have 12 years as RCA, so really bitter the Govt jumps right on a bill to have usps pay ahead, yet again, but STILL FOR 10 YEARS RUNNING, LEAVE THE FAIRNESS ACT ON THE FLOOR, TO: ALLOW ONE OF THE ONLY AND FEW TITLES IN THE ENTIRE GOVERNMENT TO BUY BACK THAT TIME (just like everyone else!). SO YOU THINK ANY OF YOUR GOVERNMENT leaders is, FOR THE WORKING CLASS??? NOT, NO? BUT HELL NO!! This time H.R. 2478 sitting on the House Floor since may 2019!!!
WHAT IS FAIR ABOUT THAT?
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