Sadeugra/Getty Images

There’s No Turning Back From Some Retirement Choices

Certain benefits decisions are irrevocable.

Retirement is a very big life decision, involving financial considerations as well as emotional concerns. But deciding whether and when to retire isn’t the only big choice. Once you’ve concluded it’s time to take the plunge, there are other decisions to make. And some are irrevocable. Let’s look at what you can change and what you can’t turn back from.

Federal Employees Health Benefits Coverage

You are eligible to continue FEHB coverage into retirement if you meet these two requirements:

  • You must be entitled to retire on an immediate annuity (including retirements under Federal Employees Retirement System minimum retirement age+10 provisions).
  • You must have been continuously enrolled or covered as a family member in an FEHB plan for the five years of service immediately before the date the annuity starts, or for the full period of service since your first opportunity to enroll (if less than five years).

You can cancel your coverage after you retire, but you can only get it back under limited circumstances. For example, if you’re continuously covered as a family member on your spouse’s FEHB enrollment, you can resume your own enrollment if your coverage under your spouse’s enrollment ends for any reason. But if you’re not covered under a family member’s FEHB, and you cancel your enrollment, that’s a one-way ticket out of the program.

If you postpone the beginning date of your annuity when you are eligible to retire under an MRA+10 retirement, you will be eligible to temporarily continue your health benefits coverage under temporary continuation of coverage provisions for up to 18 months, but you must pay the full premium. When your annuity payments begin, if you had FEHB coverage for the five years immediately before you separated, you will again have the opportunity to enroll in an FEHB plan, and the Office of Personnel Management will pay the government share of the premium.

Federal Employees Group Life Insurance

Your basic life insurance coverage, along with Option A (standard), Option B (additional), and Option C (family) coverage can continue into retirement under the following conditions:

  • You retire on an immediate annuity that begins within a month after you separate from federal service.
  • You were insured for the five years of service immediately before your annuity start date (usually the first day of the month following your retirement date).
  • You didn’t convert your life insurance to an individual policy.

If you don’t meet these requirements, you’ll have a 31-day extension of coverage, but only if you pay the first premium for the individual policy within the 31-day period.

You can’t continue your life insurance coverage unless you are receiving an annuity. If you postpone the beginning date of your annuity under an MRA+10 type of retirement, your life insurance will terminate. When your annuity begins, if you meet the usual requirements for continuing coverage into retirement, the life insurance coverage you had when you separated will resume.

Survivor Benefit Elections

Section D of the FERS Application for Immediate Retirement is where you select the type of annuity you want to receive, including the option to provide a survivor annuity. No change is permitted after your annuity is granted except in limited circumstances. See pages 13-20 of the pamphlet entitled Applying for Immediate Retirement under FERS for important information regarding the elections made at retirement for a current spouse, a former spouse and an insurable interest. 

Section F of the Civil Service Retirement System Application for Immediate Retirement provides the option to elect the type of annuity you want to receive. As with FERS, no change is allowed after you make your selection, except in limited circumstances. Be sure to read pages 5-8 of the instructions for completing the Application for Immediate Retirement Under CSRS for important information about your survivor benefit options.

Thrift Savings Plan Accounts

If your vested account balance in the TSP is $200 or more when you leave federal service, your account stays right where it is until you need it. You also can transfer eligible money into your TSP account.

You can leave your entire account balance in the TSP and continue tax-deferred earnings and low administrative expenses. You won’t be able to make employee contributions, but your account will continue to accrue earnings, and you can continue to change the way your money is invested.

Social Security

Once you file for your Social Security retirement benefit, there are only two ways to reverse the decision. You can cancel your benefits application up to a year after your benefit approval. But you can only do this once and still be able to reapply later. Or you can suspend benefit payments if you’ve reached full retirement age, but are not yet 70 years old. You’ll earn delayed retirement credits for each month your benefits are suspended, which will result in a higher benefit payment later.