Comments, Questions and Answers

Reader feedback on everything from FEHBP to Social Security.

It is rewarding to know that the readers of this column are genuinely looking for help in planning for retirement. Each week, I always get plenty of follow-up questions and, in many cases, thoughtful answers from other readers. Last week’s retirement quiz generated some interesting and important questions and comments that are worth exploring in a little more detail, so let’s take a look at some of them.

NEVER cancel FEHBP. If you feel you do not need it as a retiree because you have a Medicare Advantage Plan or military health care such as TRICARE for Life, then you may wish to suspend FEHBP to have a later option of reinstating it.

Agreed! According to the Office of Personnel Management, as a retiree you can suspend your Federal Employees Health Benefits Program enrollment to sign up for a Medicare Advantage plan, TRICARE, CHAMPVA, Medicaid or a similar state-sponsored program of medical assistance for the needy. Retirement and insurance form RI 79-9 is used for this purpose.

I am retired under CSRS and receive 80 percent of my high three [average salary]. I never qualified for Social Security and receive nothing from it, but my wife has a small Social Security pension, about $550 per month. Do I qualify to receive half of her monthly check? I have always thought I do not qualify.

Unfortunately, because you receive a pension from work not covered by Social Security (CSRS in this case), your entitlement to a spousal (or widow’s) benefit from Social Security will be reduced by two-thirds of your government pension. This is called the Government Pension Offset and is the reason why you’re correct that it’s unlikely you’ll receive the spousal benefit from your wife’s Social Security benefit.

I retired in 2001 and began working outside the government. I have been contributing into Social Security for 18 years and get pennies to the dollar. I contribute as much or more into Social Security than many people who get a hell of a lot more than I do. I know it's called double dipping, but why am I penalized? I'm 73 and still working, and plan on working until I can't. I think it's wrong and unfair.

You’re not alone in feeling that the Windfall Elimination Provision is an unfair treatment of your Social Security calculation. When Congress voted for this modified computation in 1983, this was the reasoning: The Social Security retirement benefit is designed to provide a higher replacement of income for those individuals who worked at lower wages and a lower replacement of income for those who worked at higher wages. Before the WEP was enacted, some people who earned relatively high wages during their careers—some from Social Security-covered employment and some from non-covered employment, such as government service under the Civil Service Retirement System—were treated in SSA's earnings history calculations as if they were low earners. This entitled them to a higher replacement rate under the progressive Social Security benefit formula, and Congress eventually deemed this unfair.

Social Security has a WEP calculator you can use to estimate the impact of a pension from work not covered by Social Security.

If you were to retire in May with annual leave carryover of 240+ hours, would the lump sum payout count against the annual earnings cap of $17,000?

The lump sum payment for accumulated and accrued annual leave is considered a special payment and does not count against the earnings limit for Social Security retirement or against the FERS Supplement.

Here is a hypothetical example: Juan retires at 62 in November 2018 and begins to receive Social Security benefits. In January 2019, he gets a check from his employer for $17,000 for his leftover vacation time. Because this is for vacation pay he earned before he retired, Social Security will consider it a special payment and won’t count it toward the earnings limit for 2019.

If my spouse is already collecting Social Security and I'm a retired fed and will collect Social Security at 62 in two years, can I claim "deemed" and get his amount instead of mine?

Deemed filing means that when you file for either your retirement or your spouse’s benefit, you are “deemed” to file for the other benefit as well. Deemed filing rules already apply when you file for either your retirement or your spouse’s benefit and you are before full retirement age. The Bipartisan Budget Act of 2015 extends deemed filing rules to apply at full retirement age and beyond.

A person born on Jan. 2, 1954 will reach his or her full retirement age (66) in 2020. If you turned 62 before Jan. 2, 2016, deemed filing rules will not apply if you file at full retirement age or later. This means that you can file for either your spouse’s benefit or your benefit without being deemed to have filed for the other. In your case, you can also restrict your application to apply only for spouse’s benefits and delay filing for your own retirement in order to earn delayed retirement credits.

However, if you turned 62 on or after Jan. 2, 2016, you are deemed to have filed for both your own retirement and for any benefits you are due as a spouse, no matter what age you are.

I will soon be 72 and I am in good health. However, I agree that the time will come that I will need more care. I am not sure how my federal health plan will work without Medicare at that point.

If you are retired and over 65, you have the option to enroll in Medicare Part A (hospital insurance) and Part B (outpatient/doctor’s coverage). If you are receiving Social Security retirement at that time, you will be automatically enrolled in Part A at no charge. Part B has a standard monthly premium of $135.50 for 2019. If your modified adjusted gross income as reported on your IRS tax return from two years ago is above a certain amount, you'll pay the standard premiumand an income related monthly adjustment.

Because of this additional premium, many federal retirees question the need to add Medicare Part B along with their lifetime coverage under FEHBP. Although you can’t really control how much you pay for Part B, you can choose a different FEHBP plan. By coordinating Medicare A and B with an FEHBP option that offers a lower premium, wraparound benefits (meaning the plan will waive its own deductible, coinsurance and copayments when Medicare pays first), and in some cases a health fund to help cover the Part B premium, federal retirees can have close to 100 percent coverage for inpatient and outpatient medical expenses from age 65 on.