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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...

The Hidden Cost of Federal Health Plans

Did you know that more than 25 percent of total spending under the Federal Employees Health Benefits Program goes to prescription drugs? Rising drug prices and increasing drug utilization continue to drive up FEHBP premiums.

Every year, the Office of Personnel Management sends a call letter to all FEHBP carriers. This year’s edition encourages the carriers to thoroughly evaluate options to improve affordability, reduce costs, boost the quality of care, and protect the health of their enrollees. The letter also advises that any proposed benefit enhancements must be offset by proposed reductions so premiums are not increased due to benefit changes.

The first item that OPM is setting as a theme for the upcoming health insurance open season is a focus on prescription drugs.

That makes sense, because drug costs are clearly on people’s minds. In the Kaiser Family Foundation’s latest health tracking poll, respondents identified it as their number two priority in health, just behind reducing out-of-pocket health care costs in general.

The May issue of AARP Bulletin featured a story called “Why Drugs Cost So Much.” It noted:

  • Americans spent $457 billion on prescription drugs in 2015, up 8 percent from the previous year.
  • From...

With Cuts on the Table, Is It Time to Go?

I’ve received a lot of emails lately about the proposed changes to federal retirement benefits included in President Trump’s budget submission to Congress. Employees are asking if they should move up their retirement date to August or September so they can leave before the new fiscal year begins on Oct. 1.

Here’s my first response: Remember that nothing has changed yet. Any act of Congress causing a substantial negative change in benefits is going to face a lot of opposition from groups who lobby on behalf of federal employees and retirees. Already, members of Congress who represent significant numbers of federal workers have stated their opposition to the changes.

Also, remember that that these ideas have been proposed many times in the past and so far have not been enacted. It is unlikely that all of the proposals affecting retirement will be approved this year. It’s possible that none of them will.

However, many people, including yours truly, are a little more concerned this year than in past years. That’s because Republicans are more likely to enact measures to trim federal benefits, and they now control the White House and both houses of Congress.

When...