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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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khp3655  
#1 Posted : Tuesday, February 16, 2021 5:35:06 AM(UTC)

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I am 51 and plan on retiring in 5-8 years. I currently have basic life insurance, which I have had since I started 27 years ago. I am trying to figure out the most cost effective way to take advantage of the life insurance benefits. It appears that I want to keep the basic insurance (1x rate of pay plus $200) for the rest of my life. It looks like the best way to go is take the 75% reduction plan. If I go this way, do my premiums drop to $0 the day I retire or do they stay the same (33 cents per thousand per month) until I turn 65? Either way, at this point, it seems like a relative bargain.

The Option A for $10,000 is a little more complicated, but it still seems like a reasonable investment at the 75% reduction rate. Basically, I pay $4.33/mo until I turn 60 (about $300) plus another $780 between 60 and 65 ($13x12x5), for a $2500 pay out to my heirs.

Thank you
Raoul  
#2 Posted : Tuesday, February 16, 2021 3:38:09 PM(UTC)

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You pay the Basic Premium until age 65. The Basic, 75% reduction plan is a good deal.

I would look at Option A a little different than as a 'reasonable investment'.
I would do the calculation to include the 27 years sunk cost to age 51
then look at another 14 years of premiums for a $2500 pay out.

p.s.
In the year 2060 a Snickers bar will cost $2,500 and your heirs
are gonna say "what a gyp!"

Edited by user Tuesday, February 16, 2021 4:18:50 PM(UTC)  | Reason: added a important post script

Retired July 2011
roger.d  
#3 Posted : Wednesday, February 17, 2021 7:46:01 PM(UTC)
roger.d

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Are you in good health? Have you priced TERM insurance?
Those who are, know those who are not.

If you think they are after you, what did you do wrong?
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