Survivor annuity for siblings

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Q. I am an unmarried federal employee. I max out my contribution to the Thrift Savings Plan. I plan to work until at least 62, which will give me 21 years of service, or possibly until 65 with 24 years. As a federal employee in FERS and with TSP, what is the best way to provide income for two siblings when I die? I am not opposed to taking a reduction in monthly benefits if that is the best way to do so. My home will be paid off in 2014. I have no other debt and live on about 58 percent of my take-home pay.

A. Mike: Providing income for survivors is a complex exercise, and there is no universally “best” way to do it.

Reg: With one exception, only a spouse (or former spouse by court order) can be provided with a survivor annuity. Here’s the exception: You can elect an insurable interest annuity for someone who is dependent on you financially and is a blood or adoptive relative closer than a first cousin. If you elect an Annuity With a Benefit to Named Person Having an Insurable Interest, the amount your annuity would be reduced depends on the difference between your age and the age of the person you name. I doubt that you can name more than one person to receive an insurable interest annuity. However, that decision will have to be made by the Office of Personnel Management.

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