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4 Things You Need to Know About Retirement Rules

On many occasions, someone tells me that they’re worried that there is something about their retirement that they may not realize that they don’t know. Often, this is why they attend a retirement seminar or end up hiring a professional to provide advice.

There are good reasons for federal employees to be concerned about gaps in knowledge about their retirement benefits. Let’s look at a few.

The rules have changed many times over the years.

Civilian employees have had retirement benefits for almost 100 years. In that time, the rules that apply to it have been overhauled and amended many times. Here’s just one example: differences between the newer Federal Employees Retirement System and the old Civil Service Retirement System. Under FERS, civilian service that was not covered by retirement deductions is not creditable towards eligibility or computation of the basic retirement benefit if it was performed after 1988. This includes most temporary service, such as seasonal work for the National Park Service. However, if such service was performed before 1989, it can become creditable by making a contribution to FERS (with interest) prior to retirement.

Under CSRS, this type of service counts towards eligibility and...

Weighing Your Life Insurance Options

In last week’s column, we took a look at the Federal Employees Group Life Insurance program. FEGLI is a form of group term life insurance. It has no cash value, and once you’re insured, you can choose to keep it throughout your life. For most of people, term life insurance is the best way to cover their insurance needs.

Permanent or whole life insurance is different. It generally has a fixed premium, it maintains its value throughout your life and there is a cash value component you can access. In a Kiplinger’s article about how to determine your life insurance needs, Kimberly Lankford writes that the best reason to consider whole life insurance is if you’ll need coverage beyond 20 or 30 years -- or after age 65, when term insurance gets expensive. You might want permanent insurance, for example, if you need to protect kids with special needs who will always rely on you (or your estate) for support.

There are also enrollment issues to consider when weighing your insurance options. FEGLI rarely holds open enrollment periods, when you can increase your coverage without medical underwriting. (There was one last year.) You can sign up when...

Your Money and Your Life Insurance

As federal employees plan for retirement, it’s important that they reevaluate their insurance needs. This includes health, long-term care, and life insurance. The unexpected need for expensive medical care, personal care due to a physical or mental impairment or an untimely death can throw a monkey wrench into the best-laid retirement plans.

In recent columns, we’ve looked at the cost of prescription drugs and assessing whether you need Medicare if you have federal health benefits coverage. In this week’s column and next week’s we’ll zero in on evaluating the Federal Employee’s Group Life Insurance program to determine if it is the best option for your life insurance needs. FEGLI may be the best choice for you, or you might find a better fit if you shop around. Just to be clear, I don’t sell life insurance products. I’m just here to help guide you through your options.

This week, we’ll look at FEGLI, and next week we’ll cover some of the other options.  

When it comes to life insurance, FEGLI is an easy option for federal employees. It’s offered by the federal government,  and the premium is deducted automatically...

Two Medicare Questions You Need to Think About

Whether you are turning 65, getting ready to retire, or just gathering information to become better informed, you may need some guidance when it comes to Medicare enrollment and benefits. There are two important questions for federal employees and retirees to consider about Medicare:

  • How does adding Medicare help provide more complete health coverage?
  • How do you avoid paying a penalty for late enrollment in Medicare Part B?

Federal Medicare beneficiaries are in a unique and sometimes confusing situation when it comes to Medicare enrollment because Federal Employees Health Benefit Program plans continue to cover employees as well as eligible retirees before and after they qualify for Medicare coverage. (A postal reform bill currently under debate in Congress would change this flexibility for postal retirees.) In addition, many federal employees and retirees qualify for coverage through the military’s TRICARE system or via the Veterans Affairs Department.

Because of this complexity, one of the most frequent questions I get at my pre-retirement seminars is, “What do I do about Medicare enrollment when I turn 65?”

According to the Office of Personnel Management, the percentage of federal employees working past age 65 is increasing. In September 2016 there were nearly 80...

Beware of Benefits Scams

Through careful planning over years of government service, many federal workers have transitioned from employee to annuitant and are living their retirement dream.

Unfortunately, some retirees have also endured nightmares. Along with large Thrift Savings Plan accounts and substantial retirement benefits come scammers and con artists who would like to take some of that money from you.

Recently,  AARP reported on a former financial adviser who faces up to 20 years in prison for fraud. Federal retirees are not immune from unscrupulous investment advisers. It’s important to stay educated and aware of scams to avoid unfortunate decisions that could lead to financial ruin.

My late aunt, a federal retiree, got caught up in a sweepstakes scam in her later years of retirement. It works like this: Thieves say they’re depositing sweepstakes or lottery winnings into the victim’s bank account and then collect “fees” or “taxes associated with the winnings. But the deposit check bounces a few days after the victim’s bank account has been debited to collect the so-called fees.

Retirees should be wary of telemarketing schemes involving reverse mortgage offers, insurance, and even funeral expenses. The National Council on Aging has identified the top...