The CSRS .
Social Security – Background
~~SOCIAL SECURITY-BACKGROUND
As we continue building our laundry list of things we need to know and do in order to prepare to retire well, Social Security is a major item on our list. The Social Security Act was signed on August 14, 1935 some 15 years after the Civil Service came into being on August 1, 1920. When the Social Security Act first came into being, it was only a retirement program for the primary worker. It was not until many years later around 1939, that benefits for survivors and the retiree’s spouse and children were added. Disability benefits were not a part of the program until 1956.
Today we look at the Social Security Act from a much smaller view than it was originally structured. The Act was extensive in its original format and contained provisions for national unemployment compensation, Aid for Dependent Children and assistance to states to support a number of health and welfare programs.
Today we think of Social Security as a core part of the retirement structure for employees of the Federal Employees Retirement System (FERS) as well as those employees under the CSRS Offset program. Individuals under these systems have social security deducted from payroll, while employees under the old Civil Service Retirement System (CSRS) do not.
CSRS employees may, however, be eligible for social security benefits because they worked in non-federal jobs where they paid into social security or via spousal or survivor benefits because of a spouse’s covered employment. The history of the Social Security Act and its expansion to cover the categories of spouses and survivors has been of great benefit to many families.
Two legal requirements may impact Social Security benefits for CSRS employees: the *Government Pension Offset and the * Windfall Elimination Provision. The Government Pension Offset does not affect CSRS Offset employees but the Windfall Elimination Provision might, depending on the beneficiary’s earned outside income while drawing Social Security benefits.
*DEFINITIONS: Government Pension Offset – This law affects spouses, widows and widowers who may qualify to receive a pension from a federal, state or local government where Social Security taxes were not paid from your work and may cause your Social Security spouse’s widow or widower’s benefits to be reduced.
Windfall Elimination Provision – Your Social Security benefits may be reduced if you receive a pension based on work you performed in a government agency or employment in another country where your employer did not withhold Social Security taxes from your salary.
We will discuss both Government Pension Offset and Windfall Elimination Provision in greater detail in a subsequent post.
P. S. Always Remember to Share What You Know.
Click HERE for information on Windfall Elimination Provision
Click HERE for information on Government Pension Offset
Click HERE for information on Social Security
Click HERE for information on CSRS
Click HERE for information on FERS
How To Retire Happy
~~HOW TO RETIRE HAPPY
The first step to making sure you are happy in retirement is to understand that YOU MATTER. Many of us subconsciously define ourselves by our jobs and job titles. When those things no longer exist, we may begin to wonder about the significance of our lives and our future. It is simply human nature to want to feel important in the lives of others. However, to really feel how important you are in the lives of others, you must first place value on your own life. You really do matter because you are you, a wonderful being who has contributed more than you know to helping to make our country thrive.
Federal and postal workers make up the largest workforce in the world and they perform some very important tasks. They help to keep the world moving. An unfortunate thing that I hear in many of the educational seminars I have performed, is that these same employees don’t think of themselves that way. Their biggest mistake is to not maintain a happy outlook at all times. It is understandable that losing the routine of work itself, the relationships we build with colleagues, the connection to an environment, an office or defined destination to go to, and just that daily schedule leaves many people wondering if they really matter.
It may take a little time to figure out just how important you are. But while you are figuring that out, we already know how important you are and that you really do matter because the work you performed has charted a path for that work to continue and make a difference in the continued growth of our nation. In a future post, we will discuss some interesting thoughts about our psychological profile. Remember YOU MATTER.
P. S. Always Remember to Share What You Know.
Tips For Staying Healthy
~~Tips for Your Health
Often time retirees find that a great portion of their social life has been left in the office. You spend the majority of your waking hours at work and as a result you spend most of your time with your work family. But when you retire, that work family does not necessarily retire with you. When you call them they may not have time to talk. Their schedules may now be very different from your own. Just finding time to do things together might become a challenge. It does not mean they don’t want to spend time with you; it is just that your schedules are now very different.
It might be time you established a new group of friends and acquaintances. You worked most of your adult life so you have probably had to organize a few committees, focus groups, teams and the like. Use the team-building skills you acquired from work to do something innovative and fun in your community:
• Start a walking club in your community. Name the group, print up some tee shirts and design activities that will bring about some health competition.
• Start a book club. Select interesting books and enjoy discussing the book over some home-made health eats.
• Buzz around to see if there are any thespians (would-be actors) and talented writers lurking around in your neighborhood. Start a community play house so that your community can enjoy the arts right in their own back yard.
• What about a biking and hiking club. Getting in touch with nature is both stimulating and refreshing.
• Travel clubs are nice. You don’t have to travel alone and depend on the social generosity of strangers. There are lots of group discounts just waiting to be had.
• Go dancing. Listen to some great music (the language of the Gods) it even soothes the savage beast.
• I live in the Washington Metro area and the Kennedy Center offers free, magnificent performances throughout the year. Wherever you live, I am sure you can find something equally as entertaining.
• Have you considered going to school. They say children keep you young. Volunteer at one of the local schools in your community. You are filled with knowledge, share it with a kid. They say the “darndest” things and they keep you laughing and feeling young, most of the time.
• You are looking good. Keep yourself looking good because it makes you feel good. We are so used to getting ourselves shined up for work, but when we stop working often we forget about continuing to care about what we look like. Ladies you no longer have to wait for weekends to get your hair done. You are free to go during the week at your leisure and even meet up with some of your new friends afterwards for a nice walk indoors or outdoors.
• What about a community cook-in healthy living café? Loneliness has a tremendously negative impact on our health. Once you have formed the healthy living café, the group can alternate preparing aesthetically pleasing, calorie sensitive, and budget conscious, great tasting meals. This eliminates the loneliness, controls weight, reduces high cholesterol, hypertension and brings together a circle of supportive friends with a common goal.
Retirement can be fun and exciting. It can be a time of discovery and new beginnings. Your health is what is most important.
P. S. Always Remember to Share What You Know.
Click HERE for information on Retirement Planning
Federal / Postal Retirement Planning Report Card
Retirement Planning Report Card
From your Thrift Savings Plan to FEHB to FEGLI, each of us will be ‘graded’ on our Planning Report Card. Much like when we were kids in school how well prepare ourselves on these topics, will have an impact on how well we do. If you got good grades in school, your parents often rewarded you with something special, sometimes even money to show the value and significance of getting good grades. Your Retirement Planning Report Card, however, is far more important than if you got an ‘A’ in your Social Studies class. This Report Card will truly impact the rest of your life.
You have reached another milestone in our lives where once again a report card is important. The difference is if you get a good report card by planning ahead for retirement (such as using your Thrift Savings Plan fully), your reward is to live in comfort and security. Proper planning allows you to retire on your own terms and take the worry out of how you are going to survive now that your income is much lower than it was as an active employee.
Your planning report card should include estimates of your pension income which will resemble reality the closer you get to retirement. Your Retirement Planning Report Card should also include information on your TSP.gov account any Social Security Benefits you might be eligible for and even your life expectancy. If you are postal employee you will need to access your LiteBlue account and gather any forms that you would like to maintain in retirement. Look to include your total estimated monthly retirement income and your estimated monthly expenses. Do not forget to include any additional savings and IRA’s that you have along with your spouse’s savings too. Other items you think are relevant will help you paint the best picture possible of your retirement future. It is always a good idea to consider talking with a financial professional who focuses on Federal and Postal retirees (Liteblue information can be found HERE). They are tough to come by and the average ‘Advisor’ probably doesn’t know much about your benefit package, but if you can find a FERS, CSRS and FEGLI expert – you should do yourself the favor and sitting down with them to discuss your needs.
There is quite a bit of work to do to get ready for retirement, but the sooner you get started the closer you are to reaching your retirement goals.
P. S. Always Remember to Share What You Know.
Income Sources for Federal and Postal Retirees
Sources of Income for Federal and Postal Retirees
The majority of retirees will get income from a number of sources. However, the only sources they can really depend on are –certified – sources of income. What are certified sources of income? Income that you know will be there – Social Security, Employee Pension Plans and other Personal Savings and Investments, such as your TSP.gov account.
Some of us may receive income from an inheritance, equity in our home, life insurance, and Individual Retirement Accounts (IRAs). Principally income generally comes from the three primary sources named above and quite often the third one might be missing for many retirees – Savings and Investments. Even if you are currently missing the Savings portion, it is never too late if you put a savings strategy in place and stick to it.
When you are planning for your retirement, your plans should not be based on what ifs, like winning the lottery. We would all like to win the lottery, but the odds are pretty slim. Therefore, your plans for retirement must be based on certified sources of funds. As federal and postal employees, whether you are eligible for CSRS for FERS you know that your Pension and Social Security where applicable will be there. Everything else is an add-on to enhance your comfort and security in retirement.
Whatever your financial profile, the greatest way to protect it is by always making sure that your expenses are below your income. Careful planning can help you reach this position with what you have when you make adjustments to fit your circumstances.
P. S. Always Remember to Share What You Know.
Related Articles
Click HERE for information on Postal LiteBlue
Click HERE for information on your Thrift Savings Plan
Quiz for Federal and Postal Retirement
Retirement Readiness Quiz
If you took a retirement readiness quiz how ready do you think you would be? If you find that you have already completed a task, then you are a STAR. If you need to still get busy accomplishing the task, then simply make it a part of your Individual Action Plan (IAP) for implementation. This is not actually a quiz where you get graded but more of a global positioning system to help you navigate successfully to where you want to go. Beside each item indicate if it is COMPLETE OR PENDING. If the item is pending estimate a date when the item will be complete and the action you will take to make it happen.
• Have you quantified your financial objectives? In other words, have you estimated how much money you will need to live the life you desire in retirement?
• Have you set goals for retirement?
• Do you have doable strategies to achieve those goals?
• Can you itemize the strategies to achieve the goals you have set for retirement?
• Do you know where all your important records are?
• Have you informed someone you trust about your important records?
• Do you know how to reduce your FEGLI expenses and who to work with to make that happen?
• Do you know how you spend every single dollar and cent?
• Do you know how to access the TSP.gov website
• Are you saving enough money in your Thrift Savings Plan (TSP) and is your current mix of funds right for your needs?
• Have you prepared an estimated retirement budget and devised steps to help you operate within your budget?
• Do you intend to leave a big inheritance to your children, other family members, or a charity? If so, have you set aside money or made provisions to accomplish that goal?
• Have you thought about where you will live in retirement and the cost involved?
• What would you do in the event of an unexpected and extended disability before you retire?
• Do you have an emergency fund?
• If you are a couple, are both parties completely aware of the status of the financial situation?
• If something happens to either of the parties, is each member capable of managing the family’s finances independently?
• Are you taking full and total advantage of any tax-deferred savings options offered by your employer?
• If you have dependents that rely on your income for survival, what plans have you put in place in the event of your death?
• Are you taking care of your health so that you can have a good quality of life in your retirement years?
There are many more retirement readiness questions we could pose, but I think we have sufficient fuel to allow us to take a good look at our readiness for retirement. Remember if you have not done any of the things listed, it’s ok, you need only make them a part of your individual action plan and get started activating that plan as part of your goal to Retire Well.
P. S. Always Remember to Share What You Know.
Click HERE for information on CSRS
Plan for Pre-Retirement Debt Reduction
Debt Reduction Plan
By now your laundry list of things to do as you prepare to Retire Well should be growing. There are a lot of things we want to take into retirement with us, but one thing we want to leave behind is HEAVY DEBT. Since most of us will be living off of an income that is decidedly less than what we earned as active employees, reducing our debt is a key laundry list item.
Unlike our parents and grandparents, our mortgage obligations may not be retired when we retire. Therefore, taking that debt into retirement may be unavoidable. The good news is that you might be able to trim the cost of your mortgage. One way of doing that might be to downsize, since the nest might be empty and the space you once needed while raising your family may no longer be needed. There are also other choices and options concerning your mortgage liabilities that you may want to research and examine to see if they fit your lifestyle and budget. Some of those options will be discussed in subsequent posts.
As for now there are many steps we can take to reduce our debt. First step, identify and categorize your debt as small, medium or large in terms of the balance owed. Second, we are going to evaluate the interest owed on all debts. Third, we should analyze how long we have been carrying the debt. The fourth step is to assess what percentage of your debt is comprised of NEED and what percentage is comprised of WANT.
Once you have taken the suggested steps, then begin to pay down little, small, nagging debts no matter the interest rate. After you have taken care of that, begin to pay down the debt that has the highest interest rate first because the more interest you have to pay out, the more of your hard earned money you are handing off to someone else. Then follow through by paying the remaining debts with lower interest rates. The key to making your debt reduction plan work is once you begin to pay down the debt take care not to accumulate additional debt. Dividing your debts into things you purchased because you needed them versus things you wanted, will help you avoid impulse spending.
Regardless of whether you are eligible for CSRS or FERS, part of your Retirement Plan should be to make sure you have as little debt as possible (and hopefully one at all) as you enter retirement. Think about establishing a debt reduction plan at least five years before you retire so that you can get a handle on how to use your restructured income to enjoy some of the things you wanted to do that were otherwise restricted by your commitment and obligation to work.
P. S. Always Remember to Share What You Know.
Click HERE for information on TSP.gov
Click HERE for information on LiteBlue
Click HERE for information on Retirement Planning
Plan Building: How Do I Get Started?
~~HOW DO I GET STARTED WITH A PLAN?
By now you are probably asking – How do I get started setting goals that are SMART and putting a plan into action? You get started by first simply writing down what you desire your retirement picture to reflect. Write down your goals, evaluate and analyze them so they fit your circumstances and values.
Create a strategy that is doable with short, intermediate and long-term goals with time horizons that are based in reality. Make certain that the plan you create can be put into action without causing undue stress on your emotional and financial well-being. Lastly, make room to monitor and track the movement of your plan, leaving time and space to modify the plan as circumstances and conditions change in your life both for you and your family.
A plan that starts out SMART ends with giving you in retirement the lifestyle you desire and deserve.
P. S. Always Remember to Share What You Know.
Retirement Plan for Federal and Postal Employees
Your Federal and Postal Retirement Plan – Will It Work
How do you know if your retirement plan is a good one and if it will work? Think about the strategies below:
• Your overarching goals for retirement are outlined (stay flexible).
• You have clearly written down all of your financial goals for retirement
• Are you maximizing the benefits of your TSP.gov account
• You have a spending and retirement plan for all of your income sources.
• You always review your goals before spending to avoid impulse spending.
• You have included the development of a budget that you monitor now and will continue monitoring into retirement.
• Your retirement plan includes a very close estimate of how much you can spend on clothing, entertainment, eating out and vacations.
• You plan ahead for major expenses and purchases so you don’t have to rob your savings.
• You have an emergency fund to cover unexpected expenses (3-6 months or more). You decide what fits your circumstances.
• You do comparison shopping always (ie. Search for “FEGLI comparisons” on the internet).
• Set aside some money to spend as you please, only after you have paid yourself first.
Your retirement future is important business, but you should still have some fun as you set your priorities to retire well.
P. S. Always Remember to Share What You Know.
Financial Plan for the Federal and Postal Employee
Like all Federal and Postal Employees we must all consider the importance of our Financial Plan as we prepare to live in retirement – on our own terms. Whether you are part of the CSRS system or FERS you should know the importance of having an overall financial PLAN and how vital it is for a successful retirement future. Part of THE PLAN should include a financial piece – your financial plan.
What is a financial plan? It is a thought process of what is important to you and what is required for your life in order to make your dreams a reality. A financial plan assists us in identifying what we want, how to get it and how to keep it. Sometimes it is as simple as identifying the small changes that you can make today which will have large impacts in the future? Devising a financial plan means making choices, sometimes difficult ones, in order to reach your retirement goals.
The process of building your financial plan has much to do with your value system. Our value system is often shaped by our parents. As we mature our value system may change. The values we have today, we probably did not have them when we were younger. One reason being, our responsibilities and obligations have changed.
Often when we make one decision, it simply causes us to make another decision. Constructing a financial plan and making decisions also involve trade-offs.
For instance: Would you like to maintain a Life Insurance policy on yourself or your spouse so you can protect your family? The trade-off is the cost of the insurance for the benefit of that protection. Then if you make the decision to protect your family in this manner, what is the best way (most cost effective way) of managing this expense? Should you stay with FEGLI or find a different policy? Is there a ‘best and cheapest’ policy for your needs?
Another decision you will need to work through is with regard to your TSP Account. The decisions you will need to make consists of the amount and manner you take income from your savings. Additional TSP consideration include rolling your funds into an IRA or and whether or not you should hire a professional to help you with your investments
You may have to give up something today in order to gain something tomorrow that might ultimately be of far greater benefit in the future. We save now and we plan now so that our retirement years can be spent in comfort and security.
The most educated Federal and Postal employees and retirees will likely be working with a Financial Professional to help them with these decisions. That is to say – the federal employees who choose to enjoy more of their free time and worry less in retirement will likely want someone else to manage the day-to-day minutiea of their investments and retirement plan. We may know a lot about our own circumstances and may even know a lot about the economy or the markets – but I suggest that you find a financial expert in your benefits to ensure that you are looking at all of the possible savings and advantages that you have as a result of your employment.
P. S. Always Remember to Share What You Know.
Building A Flexible Federal Employee Retirement Plan
Building a Flexible Retirement Plan
In order to make anything work from the simplest to the most complex venture, one must have a plan. One of the most important components of the plan is flexibility. Life changes, people change, and as we know – the world and what makes it run – the economics of supply and demand – impacting the way we live also changes.
Getting ready for retirement requires tremendous personal investment, both financially and emotionally. There is a laundry list of things we need to do in order to move closer to our retirement goals. As we construct our laundry list of things to do, we will compare the list to what we have already done and what we need to do going forward.
Obviously, one of the first things we need to do is develop a plan, a sort of action plan for our lives. Developing an action plan requires no real technical expertise or fancy charts and drawings. It is your own personal plan whose primary criterion is to develop a plan and stay with it. No matter how wonderfully constructed your plan, if you simply toss it aside, it is useless.
We emphasize the need to be flexible in your retirement plan, so that if you have to change some things, rearrange some items or redo it altogether, not to worry. Just don’t abandon your plan. Having a retirement plan is like having a roadmap to your desired destination. You may discover that you can take a number of alternate routes to your destination, but nonetheless, you have a roadmap that you know most emphatically leads you to where you want to go.
When you are building a PLAN for your retirement future, always remember what FLEXIBLE means to help you stay on track. F – Financial literacy is a must. You gain that literacy just as you gain any other body of knowledge – read, inquire and ask questions. L – Liabilities – know what they are and work on eliminating as many of your liabilities as possible before you retire. E – Earnings – know that your earnings will be lower than when you were an active employee, respond accordingly. X- Xceptions – there are none. We don’t get to make Xceptions to the importance of having a plan and say ‘I don’t need one”.
Everybody needs a plan in order to successfully get where they need to be. I – Invest in your future by prioritizing what your goals are and sticking to a plan that will help you reach them. B – Budget – if you have shied away from living on a budget in the past, as you move into retirement, living on a budget is your best bet to making sure your resources outlast you.
If you very temporarily step-off the train, you must immediately make plans to get back on board, it is your future. L – Lower – E- Expenses. Lower your expenses by taking advantage of services offered to seniors – eating out, travel, hotel accommodations, and grocery shopping discount-days for seniors, senior home repair programs, and homestead exemption programs for seniors.
FLEXIBLE might only look like an 8 letter word, but it packs a whole lot of punch for getting ready to retire well.
P. S. Always Remember to Share What You Know.
For information on your TSP.gov and how it will impact your retirement – Click HERE
An Economically Changing World
The world is changing. As Federal and Postal employees we face more economic challenges today than the majority of the current workforce has ever witnessed. The hardships of the Great Depression, we either read about in textbooks or heard stories from parents and grandparents, but hardly a reality for baby boomers and beyond.
Over the past several years, the reality of our finances and the turbulence of a global economy is a constant conversation at the average Federal and Postal employee’s families dinner tables. Yet, our responsibility, regardless if we are CSRS or FERS, to do what is necessary to face a retirement future with readiness, still remains. I remember parents saying, “Save for a rainy day.” The economic uncertainty of our times requires that we save for a tsunami. The cost of maintaining our standard of living is much higher today than it was for our parents.
In addition, economically, conditions have created differing and varying levels of responsibility for Federal and Postal retirees. Retirement incomes are increasingly being shared to support other family members, including adult children who are either unemployed or under-employed. Providing support to family members is what we do as Americans until they can get on their feet.
Because our plates are fuller than ever before in recent times, planning for a long life after retirement must be approached with care and a deliberate commitment to live well below our means. We can no longer economically live at our means and certainly not above our means, but below them in order to have a cushion of economic longevity. Remember, economically, the goal is to have your resources outlast you.
The technical aspects of the federal and postal employees’ retirement system from FEHB, Medicare, to FEGLI and your TSP are difficult to understand and much more difficult to master. There are such a vast number of technical pieces of the federal retirement system it seems to justify the use and consultation of both your HR office or a qualified retirement benefit expert.
Use PSRetirement.com’s easy access for more information on your TSP Account and Login information.
P. S. Always Remember to Share What You Know.
More About FEGLI – FEGLI Option C
FEGLI Option C
In previous articles we discussed Basic insurance and Options A and B and various FEGLI rates. Now let’s talk about the third option under the Federal Employees Group Life Insurance – Option C. Option C is Family Insurance. As with Options A and B, Option C’s premiums are also based on age. Coverage continues into retirement and you pay the full cost of premiums.
Option C provides life insurance for your spouse and unmarried, dependent children, excluding foster children. Option C covers your spouse between 1 and 5 multiples of $5,000 and the children between the same multiples of $2,500.
With Option C you have two opportunities to make an election — first at retirement and shortly before your 65th birthday. Even if you are already 65, you still have two opportunities to make an election at retirement and shortly after retirement.
With Option C, you may choose two levels of coverage at first election: Full or No Reduction for all multiples. With Full Reductionq, at age 65 the amount of your Option C will start to reduce at 2% a month until it reaches zero.
However, if you chose No Reduction, at the first election, the full amount of your Option C will continue until your death unless you change to Full Reduction. At the second election, you can also choose Full or no Reduction for any or all multiples under Option C.
A Special Note: If you choose not to stop the future reduction of coverage when you reach age 65, your premiums will cease and your coverage will drop 2% per month for approximately 50 months, after this period your coverage will cease. If you choose not to end coverage, your premiums will continue.
Take your time in examining and understanding your options so that you will be pleased with the decisions you make to protect you and your loved ones.
Click HERE for information on Retirement Planning
Click HERE for information on FEGLI
Click HERE for information on TSP.gov login
Click HERE for information on FEGLI Calculator
FEGLI – Option A Standard
FEGLI Option A – Standard Insurance
The Federal Government offers 3 other insurance options and we’ll discuss each in separate posts. Let’s begin with Option A- Standard Insurance.
You are entitled to continue your Option A into retirement. Option A is worth $10,000 and the cost of coverage will be your full responsibility. Premiums do increase with age. With the second month after you reach age 65, or the second month after your date of retirement, if you are already 65, your Option A will be reduced by 2% of the $10,000 or approximately $200.00 per month until it reaches $2500. $2500 will be the amount paid as a death benefit. At age 65 premiums will cease.
Many federal employee wrongly assess that $10,000 will be payable upon their death. So we want to emphasize that the amount payable under Option A is $2500 upon your death. It is a good measure to discuss insurance options with your family members or someone you trust so that they will understand what to expect from your coverage and the benefits your survivors are eligible to receive.
When preparing for retirement ask all the questions you can think of that might help you reach your retirement goals and retire well. After all, it is your life and you deserve to have the best information possible to take you into your next new adventure with confidence.
Click HERE for information on Retirement Planning
Click HERE for information on FEGLI
Click HERE for information on TSP.gov login
Click HERE for information on FEGLI Calculator
FEGLI – Some Basic Facts
Basic FEGLI facts
Federal Employees Group Life Insurance (FEGLI) can be transported into retirement. As with your Federal Employee Health Benefis (FEHB) each employee must meet the five year or earliest opportunity to enroll requirement to continue coverage into retirement.
If you fail to meet the time requir
ement prior to retirement, coverage will continue for 31 days at no cost to you with the option to convert to an individual policy. Employees eligible to continue coverage into retirement must elect to do so, it is not an automatic conversion.
The cost of your life insurance depends on a number of factors: your age, the amount of coverage selected, and health risk factors. If you decide to convert some or all of your policy, the good news is you will not be subject to a medical examination to qualify for conversion.
It should also be noted that there is generally no open season for FEGLI. However, in the rare instance where there is an open season, it is generally not open to retirees.
It should be further noted that accidental death and dismemberment coverage available to you as an active employee is not available to you in retirement as part of the government’s insurance program.
Know the facts about FEGLI as life insurance is a very important part of the planning process to RETIRE WELL.
P. S. Always Remember to Share What You Know.
Federal and Postal Retirement Planning
Let’s Talk FEGLI
FEGLI
FEGLI (Federal Employees Group Life Insurance) is Group Term Life Insurance offered to Federal and Postal employees. Federal and Postal Employees are offered a number of great benefits to help them take care of themselves and their families.
Life Insurance has long been thought of as protection for family members in the event of death, more of a burial insurance. Life insurance covers burial expenses or what I like to refer to as taking care of “the final business of our lives.” In addition to covering burial expenses, life insurance may also be used to cover other outstanding debt as well as provide for survivors.
The federal benefit plan is designed to provide its members with a comprehensive array of services to protect and enhance the lives of members and their families——–Health Insurance (FEHB), Vision and Dental (FEDVIP) coverage, a Pension plan, a way to save for retirement via the Thrift Savings Plan (TSP) and the means to prepare for the final business of our lives —life insurance.
We will discuss in later posts The Provisions of FEGLI, How FEGLI Works in Retirement and Life Insurance – WHY?
P. S. Always Remember to Share What You Know.
Click HERE for information on Social Security
Click HERE for information on Federal Retirement
Click HERE for information on FEGLI
Click HERE for information on TSP.gov login
Information: Take It One Step At A Time
Do not get overwhelmed by trying to process too much information at once.
An enormous amount of information is shared on the subject of helping Federal and Postal employees retire comfortably. It is our aim to contribute and share what we know to help you retire well and to maximize your Federal and Postal benefits.
We liken the information provided to a restaurant with the finest menu imaginable. Although, you crave to try everything on the menu, the experience will be lost if you attempt to eat everything at once. Overdoing it loses its appeal.
There are so many things to understand and digest about FERS, CSRS the TSP, the Federal Retirement Systems and therefore retirement in general. So take it one step at a time, choose something from the menu and take your time digesting it so that you can savor the flavor and remember the experience.
By taking it one step at a time, you will be amazed at how much information you have digested and how better prepared you are to select exactly what fits your needs and smile your way into a retirement future you have control over. That is the key to retiring well.
P. S. Always Remember to Share What You Know.
Additional Information on FEHB
Strong Consideration Should be Given to Holding On to your FEHB in retirement.
Many Federal and Postal retirees will have a critical decision to make about their Health Benefits moving into retirement and whether or not they should transport their FEHB coverage. If your spouse has a health care plan outside of government and you have FEHB, in conjunction with you potential Medicare elections, you should careful analysis should be exercised to determine what fits best into your plan to retire well.
There will never be a plan or plans that pay 200% coverage, but having your FEHB and Medicare upon reaching the qualifying age of 65 could guarantee your health care security. Medicare will only pay about 80% of your health care expenses and FEHB will cover the rest. However, once you become qualified for Medicare, and you are retired, Medicare will become the primary coverage with FEHB being secondary in most instances.
If you are still working when you reach age 65 and qualify for Medicare, your FEHB will remain the primary. It should also be noted that there are many services that standard Medicare does not cover and some, even, that FEHB does not cover. A careful examination of what services are covered under both FEHB and Medicare is critical to determine the best health benefit fit for you and your family.
When you become eligible for Medicare, it is very wise to look at the important benefits your FEHB offers, particularly when compared to Medicare’s prescription drug coverage. The drug prescription coverage offered via FEHB is second to none. Therefore, even when you become eligible for Medicare, don’t forget to consider holding on to your FEHB so that retiring well will be a part of your plan to live well in retirement.
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Five-Year Rule Flexibility – When Can It Be Waived?
Flexibility of the Five-Year Rule
The five-year rule for transporting your FEHB into retirement is not necessarily a hard and fast rule. There are circumstances under which OPM will grant a pre-approved waiver of the FEHB five-year rule to federal employees. Some of the circumstances are outlined below:
- When a federal employee has been under the FEHB program continuously since the initial date of the agency’s most recent statutory buyout authority or an OPM approved buyout or early retirement authorization and the employee retires during the buyout or OPM-authorized buyout or early out period.
- When an employee receives a buyout or takes an early optional retirement or discontinued service retirement based on an involuntary separation because of a Reduction in Force (RIF) a directed reassignment, a reclassification to a lower grade or when a position is abolished.
OPM will also consider other waivers (in addition to the five-year rule) on an individual or limited basis.
Postal employess can access their FEHB benefits through PostalEase and LiteBlue
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Military – Tricare and FEHB
Tricare and FEHB
Federal and Postal employees must meet the 5 year enrollment requirement in order to take my FEHB into retirement. However, if you don’t have the required time, you may use your Military Tricare time to qualify for FEHB.
Military personnel enrolled in Tricare (regulated by the Department of Defense (DOD) is a health care program that serves Uniformed Service members, retirees and their families around the world) are able to count that Tricare time towards the required five year provision for FEHB as long as they are enrolled in an FEHB covered health plan at retirement.
As a federal employee you do not have to worry about filling out an application to keep your health benefits when your retire. When your retirement becomes effective, your coverage will automatically transfer to the Office of Personnel Management (OPM) where they will process your retirement papers and take care of you as a retiree. Your agency will no longer be responsible for you.
If, however, you decide that you don’t want to take your FEHB into retirement, you will need to include in your retirement package a fully completed SF 2809 (Benefits Registration Form) cancelling your coverage.
FEHB access for Postal employees HERE
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