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Don’t Believe Everything You Read

By now, all of us have come into contact with false information, especially when it’s spread via social media. Sometimes, this happens in the federal retirement world.

A client recently wrote to me in a panic because she had read that if she retired under the postponed MRA+10 retirement provisions of the Federal Employees Retirement System, she wouldn’t be eligible to continue her health insurance. This is simply not true. The article she had read was written by a financial adviser who was most likely sincerely trying to be helpful. However, he may not have understood that under FERS rules, a “postponed” retirement actually is considered an “immediate” retirement.

On the Office of Personnel Management’s Federal Employee Health Benefits Program website, there’s a Frequently Asked Questions section that includes the following language:

As long as the following conditions are met, you may continue your FEHB coverage into retirement:

  • You must have retired on an immediate annuity (that is, an annuity which begins to accrue no later than one month after the date of your final separation); and
  • You must have been continuously enrolled (or covered as a family member) in any FEHB Program plan (not...

3 Things To Do This Open Season

This week, the Office of Personnel Management made its annual announcement about premiums under the Federal Employees Health Benefits Program. The good news is the average premium increase, 1.5 percent, is the lowest since 1996. The bad news is if your plan is increasing its premium by $500 per month, then the average means nothing to you.

If you’re eligible to participate in FEHBP, then you’re eligible to change your health plan, and your supplemental dental and vision coverage, during the upcoming open season that runs from Nov. 12 to Dec. 10. Current employees also can sign up for a flexible spending account for 2019.

Although many FEHBP participants will maintain the same health coverage for 2019 as they carry this year, everybody should do three things before they make a decision about their this open season.

Look at how your existing plan will change in 2019. The front cover of every FEHBP plan brochure will show the page references for your plan changes for the upcoming year. You should review the following factors that will determine your total out of pocket cost for health care:

  • Premium
  • Plan contribution to a health fund or medical account, health...

Best Dates to Retire 2019

Download the Best Dates to Retire 2019 Calendar

It’s time for our annual look ahead at the best dates to retire in the next year. As always, your retirement coverage under the Civil Service Retirement System (including CSRS Offset) or the Federal Employees Retirement System (including transfers to FERS) will be an important factor in choosing the best date.

CSRS

Some of the best dates to retire for CSRS employees occur when the end of the month (or one of the first three days of the month) coincides with the end of a leave period. This allows a final leave accrual (remember, annual leave is paid in a lump sum after you separate) and also ensures that the day after your separation is the first day you begin accruing CSRS retirement benefits.

The best dates for CSRS in 2019 that will allow a retirement at the end of the month (or within the first three days of a month) and also at or near the end of a leave period will be Jan. 3, Feb. 1, March 1, March 30, Aug. 2, and Aug. 31. Jan. 3, 2020, would also work, because it’s within the 2019 leave year...

Making a Date With Retirement

Next week, I’ll present my annual Best Dates to Retire column. I look forward to preparing it every year. It’s a particularly popular topic as employees get closer to retirement under either the Civil Service Retirement System or the Federal Employees Retirement System. Helping people select the best retirement date was one of the first things I learned to do when I became a federal employee benefits specialist in the 1980s.

With more and more employees now retiring under FERS, it makes sense to think in terms of not just one, but three best dates. FERS retirement involves applying for the FERS retirement benefit, Social Security retirement benefits and Thrift Savings Plan withdrawals. Each of these could be done on a different date. Although it’s important to carefully choose your formal retirement date, under FERS it’s even more critical to figure out exactly how much income you’ll need in retirement and when you’ll begin receiving your benefits.

When I refer to a best date to to retire, I’m assuming that the would-be retiree has achieved eligibility for an immediate voluntary CSRS or FERS retirement. For CSRS employees this is generally at age 55...

The Power of TSP Savings

I recently went through some old documents that I’ve saved since 1987, and found the first Thrift Savings Plan open season brochure. It estimated that a federal employee with an average salary who saved 5 percent of basic pay in the TSP eventually would have about a third of their retirement income come from their investments. The other two-thirds would come from Social Security and the Federal Employees Retirement System basic benefit. For many employees retiring today, that initial projection is becoming a reality.

The TSP is arguably the most important part of securing your retirement. It’s the one benefit that is in your control in terms of how much you save and where you invest those savings. This can be a blessing or a curse, depending on how committed you are to saving and how you manage your long-term investments. Some retirees will receive a larger portion of of retirement income from their TSP accounts if they are able to save a significant portion of their income and be consistent about managing it. Others might have to rely more heavily on their basic government pension benefit and Social Security.

It’s important to remember that if you...