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Advice on how to prepare for life after government.
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Are You Financially Ready to Retire? A True-False Quiz

“You can be young without money,” Tennessee Williams once said. “But you can’t be old without it.” When it comes to planning for retirement, there’s a difference between being eligible to retire and being able to afford it.

In working with federal employees, I’ve found that many think they don’t have enough money to retire, but in fact are more financially prepared than they realize. For example, I’ve met an employee with more than 40 years of federal service who is saving $24,000 year in the Thrift Savings Plan, but still is worried about becoming destitute if he retires at 62.

Others have their eye on the eligibility milestone, but might be looking for a second career when their money runs out. I’m thinking of one who is planning to retire at 58 with the minimum required service of 30 years, but is struggling to contribute 5 percent of his salary to his TSP account. On top of that, he has all of the $150,000 in his account invested in the G Fund. And did I mention he has an ex-spouse who will be receiving 50 percent of the first 20 years...

How To Make Sure You Get What You Deserve

You don’t need to become a retirement specialist to adequately prepare for your post-government years. But it is important to become familiar and confident about the retirement benefits you’re entitled to receive based on your federal career.

The best safeguard against any kind of mistake in calculating your benefits is knowledge. Here are some steps you can take to ensure you get the benefit you’ve earned:

Attend a pre-retirement or mid-career planning seminar, if available from your agency or a private vendor.

Take advantage of online training opportunities. Here are a few examples:

Get basic information about the Civil Service Retirement System, the Federal Employees Retirement System, the Federal Employees Health Benefits Program, the Federal Employees Group Life Insurance program, the Thrift Savings Plan and Social Security:

Be sure that those who may have access to benefits you’ve earned remain informed. These include:

  • Your spouse
  • Guardian of your unmarried dependent children
  • Former spouse with court-ordered benefits
  • Beneficiaries of your TSP, CSRS or FERS, and FEGLI benefits
  • Designated survivor...

Sometimes, Your Benefit Really Is Too Small

I love it when a story has a happy ending, don’t you? Some of you may remember last year I wrote about a widow named Janet who was the surviving spouse of a Civil Service Retirement System-Offset retiree. Janet suspected she was being shortchanged by a significant amount in her CSRS survivor annuity.

It all started last June when Janet wrote to me requesting help. Here is an excerpt from that email:

My husband passed away January 15, 2015. He was a CSRS Offset annuitant who retired in January 2014. My CSRS survivor annuity was supposed to be $3,649/month (55% of my husband’s unreduced monthly annuity of $6,531.72, plus 1.6% COLA for 2015). Because he was covered under the CSRS Offset retirement plan, OPM told me that my survivor annuity would be reduced by an offset of $1,107.80/month. I applied for Social Security Survivor benefits, and was awarded $396.10/month as a widow. This amount was small because I have my own Social Security benefit of $1,816.10. The widow’s benefit amount was based on my husband’s work record, which resulted in a higher Social Security...

Getting the Best Deal on Life Insurance

Last week, we looked at the options available under the Federal Employees Group Life Insurance program. Now let’s see how the plan stacks up against other alternatives.

Federal employees are required to pay two-thirds of the premium rate for basic FEGLI coverage, while employers in the private sector generally cover the full cost of their employees’ basic coverage. Everyone covered by FEGLI pays the same premium regardless of their health status, unlike individual coverage where premiums generally depend on the health of the person being insured. As a result, if relatively healthier federal employees compare FEGLI to private individual coverage, FEGLI could appear more costly.

Basic FEGLI and Option B (which covers your life for one to five multiples of your annual basic pay) will automatically increase in value as your pay goes up, regardless of your age or pre-existing health conditions. Option B and Option C (covering the lives of your spouse and eligible children) can be increased when there is a life event such as marriage, divorce, birth,  adoption of a child or death of a family member, without proof of insurability. Option C can be used to cover someone who may not be able to acquire...

The Other Open Season This Year

Earlier this year, I wrote about a rare event coming up this fall: an open season for the Federal Employees Group Life Insurance program. FEGLI is the largest group life insurance program in the world, covering over 4 million federal employees and retirees, as well as many of their family members. During the open season, employees can increase their life insurance without having a qualifying life event or needing to prove insurability.

If you’re getting close to retirement, you should know that in order to maintain any added coverage in retirement, the coverage must remain in effect for at least five years prior to your retirement date and you must be eligible for an immediate (as opposed to deferred) retirement.

Let’s look at some of your FEGLI options, and how they move with you into retirement.

Basic

Most employees have been enrolled in Basic FEGLI since the day they were hired (unless they waived this coverage). It is valued at your current salary (including locality pay) rounded up to the next $1,000, plus $2,000. Every time you receive a promotion, step increase or other pay adjustment, the amount of basic life insurance goes up automatically. The...

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