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FERS Sick Leave Conversion

The National Defense Authorization Act (HR 2647) was signed by the President that now allows FERS employees similar sickleave benefits as CSRS employees. However, the credit is phased in with a 50 percent credit for those who retire now and full conversion after January 1, 2014. Go to our Sickleave section for complete details and a conversion calculator. More to come.

   

 

Diabetes - Nutritional Help by Chuck Jumpeter

 

One key point to consider for married retirees is the election of a survivor annuity for your spouse. If you elect a full survivor's annuity your spouse will receive 55% of your annuity when you die. The cost for this is just under 10% of your annuity. Some retirees consider alternatives such as a large insurance policy. There are risks to that approach.

Another concern is that if you don't elect a survivor annuity for your spouse, she/her won't be eligible to participate in your Federal Employees Health Benefits plan (FEHB) after your retire.

Read on for complete information.  

 

Options

Many approaching retirement debate whether or not to take a full survivor’s annuity – which reduces their annuity by close to 10% – or to simply purchase a large insurance policy, at less cost, instead. There are a number of options for you to consider and each option has its own potential risks that need to be evaluated.

Retirees can take a full or partial annuity or depending on your personal situation and how much you saved through prudent investing you may be able to forgo a full survivor’s annuity with some exceptions. 

Regardless of what you decide you need to know several key facts. Your spouse MUST agree to a reduced annuity and sign the waiver form included with your retirement application. Also – and this is a critical issue –  if you and your spouse elect NO survivor’s annuity your spouse will not be covered under your federal health insurance coverage when you retire. You MUST elect a minimum annuity as described on your retirement application for your wife to be covered under your Federal Group Health Insurance program. View the CSRS and FERS minimums before electing your survivors benefits if you want your spouse to be covered by the FEHB program.

I consider the insurance option too great a risk for most spouses. The survivor's annuity is backed by the federal government. There isn't any third party involved. If you and your spouse choose an insurance policy rather than have your annuity reduced research the insurance company thoroughly before making this decision. Insurance companies can go bankrupt and your spouse could be left with nothing. I'm not saying that insurance should not be considered at all, what I'm saying is that you must be very careful. If you decide to buy insurance instead of electing a survivor's annuity you can check the insurer's financial stability with several rating services. Make sure that the company you intend to work with is rated high on their lists. A.M. Best ratings are free as long as you register on-line and they are very easy to use. They rate the financial strength of Insurance companies from A++, Superior to S (Rating Suspended) and everything in between. Several services such as Weiss Ratings charges $14.95 for a comprehensive rating. I found the A.M. Best site very easy to use and all that I had to do was register to obtain unlimited ratings.

Insurance Rating Links

A.M. Best http://ambest.com/ratings/search.html
Moody's Investor's Service http://www.moodys.com/
Standard and Poor's http://www.standardandpoors.com
Weiss Ratings http://weissratings.com

NOTE: Many of these rating reports are also available at public libraries.