Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

The Most-Asked Federal Retirement Question

Are you unsure about whether you should enroll in Medicare after you’re retired if you’re also covered under the Federal Employees Health Benefits Program? If so, you’re not alone. The number one query I get in my email inbox starts something like this: “I have a simple question for you. I’m about to turn 65 and I’m not sure what to do about Medicare enrollment.”

Unfortunately, this is not a simple question to answer. First of all, Medicare has four parts: A (hospital Insurance), B (outpatient or doctor’s coverage), C (Medicare Advantage) and D (prescription drug coverage). Each part provides benefits that are largely duplicated by FEHBP coverage. In addition, you will continue to be covered by your FEHBP plan even if you choose not to enroll in Medicare. Despite both of these facts, the majority of federal retirees choose to enroll in Medicare Part A and Part B. Let’s explore why.

Most people will have paid the Medicare hospital insurance tax (1.45 percent payroll tax) during their careers and will automatically be entitled to Medicare Part A without paying a premium. This coverage, when combined with most FEHBP plans, will generally...

Retired, But Still Working

An essential part of retirement readiness is planning for your life after retirement. Many of my friends and associates are making this transition and I’m beginning to see a pattern.

There are those who jump into retirement headfirst, like my husband. He adjusted naturally to life without an alarm clock, rush hour traffic and someone else setting his schedule. (It helps that I’m busier than ever, so we’ve reversed our roles—he’s now the primary caretaker at home.)

Then there are those who phase into retirement, like my friend, Georgia. She returned to her government employer for short stints as a reemployed annuitant. She took time off in between to welcome three grandchildren into the world and to help her mom and grandmother be more comfortable near the end of their lives. Many federal retirees are not only financially prepared but also mentally ready to build a life of volunteer activities, leisure pursuits and hobbies that provide a sense of fulfillment.

Then there are people like Dennis Damp, who retired after 35 years of federal service. Dennis writes a popular federal retirement blog, where he shares experiences of life after retirement and offers tips and ideas...

Here’s the Good News

One of the things I love about my job of helping federal employees understand their retirement benefits is that I mostly provide good news—and when the news isn’t great, there’s generally a reasonable solution to make it better. Most federal employees I talk to end up pleasantly surprised about their potential retirement income.

There are times when an employee may be eligible to retire, but due to a variety of factors, such as entering federal service later in life, may have to work a little longer than they would like. But in most of these cases, the employee is grateful to know they can work long enough to earn a defined benefit (pension) with as little as five years of civilian federal service, and can be fully vested in their Thrift Savings Plan account after only three years of service.

I love when an employee finds out the value of retiring under the Federal Employees Retirement System after viewing it as the sum of three parts: the FERS basic benefit, Social Security and the Thrift Savings Plan. I meet federal employees on a regular basis who are going to receive the same net income when they wake...

What Does That Word Mean?

How to do you ask for a drink at a restaurant? Do you order soda, pop, a soft drink, or a Coke? In some parts of the country, a request for a Coke is interpreted as simply asking for a carbonated beverage, not necessarily Coca-Cola. That can be confusing.

The same thing is sometimes true in the federal benefits world. For example, the term “annuity” is often used to describe a retirement or survivor benefit. But annuity also can be used to describe a life insurance product or the TSP annuity withdrawal option. These are all very different benefits, but what they have in common is a lifetime stream of income, so they each can be referred to as an annuity.

Other terms describing federal benefits can be equally hard to sort out. Let’s look at some of them.

Medicare and Medicaid

Medicare is health insurance for people age 65 and over and certain people with disabilities or end stage renal disease. Original Medicare is made up of Part A (hospital insurance) and Part B (doctor’s coverage or outpatient care). Medicare also has Part C (also known as Medicare Advantage) and Part D (prescription drug coverage). Many federal...

More Things To Consider When Making Your Annuity Election

Last week, we covered “13 Things to Know About Your Annuity Options,” which outlined some of the choices federal employees have to make when electing Civil Service Retirement System or Federal Employees Retirement System benefits. Those include spousal survivor benefit elections for maximum or partial survivor annuity; no survivor benefit in the form of an annuity payable only during your lifetime; an insurable interest election to provide for someone who has an insurable interest in you (i.e. a financial need for the income that you are providing); and an option to provide for a former spouse even though the survivor annuity may not have been awarded in the court order at the time your divorce was finalized.  

After reading the comments that followed last week’s column as well as a number of emails I received about it, I decided that this topic deserves a little more attention.  

This is a critical decision federal employees make at the time of retirement. Understanding the value and cost of this election can have an impact throughout the remainder of your life and, if you are married, the life of your spouse.  

Let’s take a look at some of the comments...