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

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.


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...

What If...?

Last week, I told a cautionary tale about the costs of long term care and the Federal Long Term Care Insurance Program.

The column drew a lot of response. Some of you wanted to know more about the possibility of self-insuring against the need for long-term care. According to an article in Kiplinger’s Personal Finance, you need very deep pockets to self-insure. You can compromise by buying a policy that combines life insurance and long-term-care coverage, or pairs annuities and long-term care.

Some folks assume their family members will provide long term care, if needed. But keep in mind that may be asking a lot of them. According to the Family Caregiver Alliance, only 30 percent of caregivers provide care for less than a year, and 24 percent provide it for more than five years. Many caregivers of adults are themselves growing older. To me, these statistics are one of the best arguments for buying at least a minimal amount long term care insurance.

Readers also asked about alternatives to the FLTCIP. Long term care insurance is an expensive and long-lasting commitment. It is important to shop around and consider all options when making this type of purchase. FLTCIP...

Why You Should Care About the Long Term

If you purchased federal long term care insurance before Aug. 1, 2015, it’s time to brace yourself for another increase to premiums this summer. You may recall that in 2009, premiums rose up to 25 percent for some enrollees in the Federal Long Term Care Insurance Program. Then, those who enrolled on Aug. 1, 2015 or later faced higher premiums than those who had enrolled earlier.

The FLTCIP was created in 2000 and is offered to federal and Postal Service employees and annuitants, active and retired members of the uniformed services, certain other eligible groups, and their qualified relatives. It is the largest employer-sponsored group long term care insurance program in the country, with more than 273,000 enrollees.

What are the odds of needing this type of insurance? According to a Health and Human Services Department website, here are the latest statistics:

  • Someone turning 65 today has almost a 70 percent chance of needing some type of long-term care services and support in their remaining years.
  • Women need care longer (3.7 years) than men (2.2 years).
  • One-third of today’s 65 year-olds may never need long-term care support, but 20 percent will need it for longer...

Social Security: To Delay or Not to Delay?

Federal retirees under both the Civil Service Retirement System and the Federal Employees Retirement System earn a government pension and have the opportunity to accrue investment income in the Thrift Savings Plan. Nevertheless, Social Security can still be a significant part of a federal employee’s retirement package.

The Social Security Administration reports that in 2015, over 59 million Americans received almost $870 billion in Social Security benefits. Social Security is the major source of income for most of the elderly in the United States.

According to SSA:

  • Nine out of ten people age 65 and older receive Social Security benefits.
  • Social Security represents 39 percent of the income of the elderly.
  • Among elderly Social Security beneficiaries, 53 percent of married couples and 74 percent of unmarried persons receive half or more of their income from Social Security.

The decision to claim a Social Security retirement benefit can be as simple as logging into Social Security's website and filing online about three months before you would like to receive your first payment. Or, it can be a lot more complicated. Here are some reasons why:

  • Your benefit is permanently reduced by 20 percent to 30 percent (depending on your...

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