Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

Thinking About Insurance, Part Two


Last week, we began looking at how the need for various types of insurance changes as you progress through your career, focusing on the first two stages of the typical working life: early- and mid-career. This week, let’s look at the latter two stages: pre-retirement and retirement.


Health Insurance: At this stage of life, you need to be sure that your health insurance coverage matches your health concerns. Do you have a chronic illness that requires expensive therapy or prescription drug treatment? Are you at risk of  heart disease, stroke or diabetes? Do you see a specialist on a regular basis? You should have a comprehensive health plan. Review your deductibles, coinsurance and catastrophic protection of your existing Federal Employees Health Benefits Program coverage. Compare your plan to others available to you, using the Office of Personnel Management’s online FEHBP tool.

It’s important to remember that health and life insurance coverage ordinarily must be in effect continuously for at least five  years before your retirement date or you will be ineligible to carry this benefit into retirement.

Life Insurance: By this stage, your needs for life insurance may be diminishing. Are your children grown and not as financially dependent on you? Is your mortgage almost paid? How much is in your Thrift Savings Plan account? This investment is now part of your retirement income that is available to you as well as to your beneficiary should something happen to you.

It’s a good idea to re-evaluate your life insurance coverage every five years. Consider that Federal Employees Group Life Insurance coverage will cost 13 cents per $1,000 biweekly at age 50; 23 cents per $1,000 at age 55; 52 cents per $1,000 at age 60; and 62 cents per $1,000 at age 65. The cost continues to rise every five years to age 80 when it levels off at $2.40  per $1,000 biweekly. There’s more information on OPM’s life insurance page.

You may cancel your FEGLI coverage at any time, unless you have assigned your insurance to another party.

Survivor Benefits: At pre-retirement, you should begin to request annuity estimates that will not only show you the value of your retirement as of a given date, but also provide you with the information regarding the value of survivor benefits and insurance coverage. An annuity estimate under either the Civil Service Retirement System or the Federal Employees Retirement System also will reveal any inconsistencies in your federal service history and the need to address any service credit issues. Here’s more from OPM on the subject of planning and applying for retirement.

Social Security: To find out what your spouse and dependent children would be entitled to from your Social Security record, set up an online account and check your latest personal benefits statement.

Long-Term Care Insurance: You’re at the age where most people have made up their minds about long-term care coverage. A 60-year old could purchase a $365,000 lifetime benefits for a little more than $300 per month, including a 5 percent automatic inflation protection feature and comprehensive coverage that pays for in-home care as well as facility care. The 5 percent inflation feature means that every 14 years or so, the amount of the benefit doubles. Use this online calculator to price the cost of Federal Long-Term Care Insurance Program coverage.


Health Insurance: After your career officially ends, you presumably will carry your FEHBP coverage with you into retirement. At this stage, if you’re approaching age 65, you should consider Medicare. I explored the relationship between these two types of coverage in a column last year. It also links to a series of previous columns on the subject.

Life Insurance: Once you retire and reach age 65, your FEGLI insurance may begin reducing, depending on the options you selected at retirement. In many cases, you will be left with no premiums, but only a minimal amount of remaining coverage. If your needs are mainly for final expenses, then there is no longer a need to pay high premiums to maintain your pre-retirement level of coverage. This is an area where retirees will generally spend less money in retirement.

Survivor Benefits: If you were married at retirement, you probably elected a spousal survivor annuity. Your latest statement from OPM will show you its current value. This is a very valuable benefit to a surviving spouse as it will provide a partial replacement of your retirement benefit should you die before your spouse, and will protect your spouse’s right to maintain FEHBP coverage.

Social Security: Now that you have retired, you must consider when is the best time to apply for Social Security retirement benefits. You have an eight-year window from age 62 to 70. Here’s more information from the Social Security Administration. Remember, if you’re still working, there’s an earnings limit until you reach your full Social Security retirement age. SSA also offers an earnings test calculator.

Long-Term Care Insurance: By now, you’ve probably made a decision regarding your need for long-term care insurance. As you get older, it is more difficult to purchase this type of insurance, since there are questions to answer about your health and the monthly premiums are higher when you purchase at a later age. Remember, although the cost of insurance is expensive, so is the cost of care. For example, in the Washington metropolitan area, the cost of nursing home care costs an average of $90,520 per year with an average two-year stay.


Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement as well as the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on

Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


When you download a report, your information may be shared with the underwriters of that document.