Planning for Federal Retirement: Death Benefits

In this article, we’ll deal with an essential yet unsettling question: What benefits would be payable, and to whom, when you pass away after retirement? It all depends on the situation.

If you have chosen a beneficiary or beneficiaries, they will receive the benefits they are legally entitled to. In case you have a surviving spouse for whom you have opted a survivor benefit, they will start receiving that benefit. If you registered in the Federal Employees Health Benefits (FEHB) program and chose the self and family or self plus one option, whoever was insured will continue to be eligible for that benefit as long as one of them receives a survivors annuity.

If you have Federal Employees’ Group Life Insurance (FEGLI), the profits will be distributed to those you choose. The same may be said for your Thrift Savings Plan (TSP) account. Survivor payments, as well as a one-time death benefit of $255, may be payable depending on your Social Security coverage.

If you haven’t specified any beneficiaries, any benefits that can be passed on will be allocated in the following order:

• to your widower or widow; or, if none
• to your child or children, with the part of any late child distributed among descendants of that child; or, if none, 
• to your parents in equal parts or the entire sum to the surviving parent; or, if none, 
• to the administrator or executor of your assets; or, if none, 
• to your other next of kin as determined by the state laws of where you resided.

You are not required to make a beneficiary designate if you are comfortable that your death benefits will be paid in the order specified above.

If you have filed any designations, you should check to see if you still feel the way you did when you filled out the paperwork. There have been far too many instances where freshly employed, single employees chose their parents to get their life insurance and then failed to modify it when they married, had children, or divorced.

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