Q. My husband and I both work for the Postal Service. He is retiring March 1 under CSRS. I have 25 years in working for the Postal Service and have at least eight years left to retire (FERS). We elected not to take the survivor benefits because I’m still working at the Postal Service and I will have him on my medical plan. We have two insurance policies on both of us in case of death. But I’m not sure if I understand the point of survivor benefits. Do you have any numbers on the pros and cons of survivor…
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Q. I took the Voluntary Early Retirement Authority on Jan. 31 at my minimum retirement age. I had 26 years at the Postal Service under FERS. After 16 years of marriage, I became a widow. The only income I have is my annuity and the special retirement supplement from the Office of Personnel Management. Will I be eligible to receive Social Security benefits from husband at 60, and will they end at 62? When I turn 62, my supplement will end. I have $190,000 in the L2020 fund. Would it be beneficial to me to start receiving money from my…
Q. In Reg Jones’ column, he states, “Choosing to buy an insurance policy instead of a survivor annuity is seldom a good idea. Could you please expand on that thought? The financial planner I talked to, who also sells insurance, says if you are healthy, the insurance route will be cheaper to pay for and more lucrative in the end. If you plan on dying young, the survivor annuity is best. A. This is a complex decision, and you should proceed with care since it is irreversible once it’s made. The simple answer is “guarantees.” The federal survivor annuity is the…
Q. Can you leave a percentage of your Thrift Savings Plan account to grandchildren’s 526 college fund? A. This is really a question for an estate planning attorney, but it seems to me that this is like asking if you can designate a person’s Roth IRA as a beneficiary — and the answer to that questions is no.
Q. I will be retiring at the end of this year with 37 years and 10 months of service. I am a CSRS employee and will be 57 years old in September. My annual annuity would be $81,958. I will have a little over $200,000 in my Thrift Savings Plan account. Is it smartest to take the spousal annuity or take out a life insurance policy on myself to sustain my wife once I pass away? My annual annuity will be reduced by around $7,900 a year if I chose the spousal annuity. Which would be the wisest? A. This isn’t your choice…
Q. I’m retiring June 1. I’m 62 and will be 63 in September. I’m in CSRS Offset with 36 years and five months. Accrued sick leave will give me 37 years and six months. I’d like to hold off on taking Social Security. I might work when the dust settles in retirement. I have 35 years of covered Social Security earnings, so no windfall elimination provision reduction, just the CSRS Offset. Would it be wiser to take an annual 4 percent draw from the Thrift Savings Plan, wait until I’m 66 and then take Social Security? I have $205,000 in…
Q. My husband and I are both retiring soon, he under FERS and me under CSRS. His income will be made up mostly of Social Security, while mine will be mostly CSRS. A full annuity for him would cost $425 a month. Does it make sense to elect this annuity given the cost? Would a term life insurance policy be a better alternative? I need to put the paperwork in this week. A. There is no universal answer to this question, but if in doubt, the safe bet is to elect the full survivor benefit for your spouse. To answer this question properly would take…
Q. As I read the information in the retirement pamphlets, it states that “a blood or adopted relative closer than first cousins (this includes children, siblings and a parent) are presumed to have an insurable interest.” If I retire in good health, could I elect an insurable interest survivor benefit for my adult son or daughter (blood relatives) even though they are not my dependent or disabled? A. Yes.
Q: A co-worker is trying to convince me that taking an annuity without survivor benefit is more cost-effective than with the survivor benefit. He says it is better to take the full benefit and buy an insurance policy to protect my wife when I die. Besides the health insurance aspect of that decision, I argue that the survivor benefit is the better choice. I believe you wrote an article on why it is better to take the survivor annuity. Would you please repeat that advice and would you also point to where I may find more information on this question?…