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Thinking About Insurance, Part Two

  • By Tammy Flanagan
  • March 22, 2013
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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.


Pre-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 ...

Thinking About Insurance Early

  • By Tammy Flanagan
  • March 15, 2013
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Your working life can be divided into four stages: early career, when your adult life is beginning to take shape; mid-career, where you may have a growing family and increasing financial responsibilities; pre-retirement, when the kids may be grown and you have an empty nest; and retirement years, with more health care needs and a fixed income, but fewer financial responsibilities.

The cost and needs for different types of insurance will change as you go through each phase. This week, let’s look at the first two: early career and mid-career. Next week we’ll examine the latter two stages.

Early Career

Health insurance: At this stage of life, you need good preventative care and protection in case of an accident or sudden major illness. You might consider a health maintenance organization or lower-option preferred provider-type plan. Your focus should be on low premiums and good preventative benefits.

Life Insurance: Who is depending on you financially? If something happened to you, how would that affect them? What type of risk is involved in your lifestyle? Do you travel to places where an act of terrorism or an act of war is more likely? Do you carry a gun and a ...

Cliff Divers, Worker Bees and Retirees in Training

  • By Tammy Flanagan
  • March 8, 2013
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I recently received an email with this unusual question: “Should I stop/reduce contributing to my Thrift Savings Plan because I am 65?”

The emailer referred to a recent column in the Wall Street Journal by Carolyn T. Geer, entitled “How to Get to Retirement? Practice!,” noting that in it an expert had offered the opinion that contributions to 401(k) plans are the “least important” piece of the retirement puzzle for people in their 60s.

That expert, Christine Fahlund, vice president and senior financial planner at T. Rowe Price Group, describes three kinds of retirees:

  • Cliff Divers, who go cold turkey from full time employment to full-time retirement as soon as they’re eligible. These are the workers who have been planning their retirement for 35 years and are ready to enjoy their life after retirement.
  • Worker Bees, who stay in their jobs longer than most people and delay retirement. These employees typically work more 35 to 40 years and sometimes have trouble visualizing life after retirement.
  • Retirees in Training, who continue working after they are eligible to retire, but begin their retirement prior to actually retiring. In the federal sector, this type of person would be among the ...

Retirement Resources

  • By Tammy Flanagan
  • March 1, 2013
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If you are planning to retire between today and June 30 (which is one of the best dates to retire if you’re under the Federal Employees Retirement System) or July 3 (an optimum day for those under the Civil Service Retirement System), then it is time to begin to figure out the forms you need to fill out, gather and sign.

I’ve written plenty of columns in the past on how to get ready to retire. Here are some of my favorites:

Forms

The Office of Personnel Management provides a set of forms online that you’ll need to fill out. Your agency retirement specialist would love to have you turn these in at least 30 days prior to your retirement date -- or better yet, 60 to 90 days.

Here are the key forms:

The standard retirement application:

  • CSRS SF ...

What You Need to Know During a Furlough

  • By Tammy Flanagan
  • February 22, 2013
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For some (though not all) federal employees, the threat of furloughs as a result of looming budget sequestration is real, and agencies are beginning to prepare for the possibility. Here are some things you should be aware of and resources you might want to have at your disposal if the threat becomes a reality.

Retirement Credit

For purposes of retirement credit, a furlough is treated as leave without pay. The rules governing the Civil Service Retirement System and the Federal Employees Retirement System allow up to six months of leave without pay to be credited towards the eligibility for and computation of retirement benefits during any calendar year. You are not required to make a deposit (payment) to the retirement fund under such a scenario. The high-three average salary used to compute benefits will not be affected, since it is the salary rate that is in effect that is used to compute the high-three, not the pay actually received.

Leave Accrual

Here’s what the Office of Personnel Management says about leave: “The accumulation of nonpay status hours during a leave year can affect the accrual of annual leave and sick leave. For example, when a full-time employee with an ...