Question 1
I have worked for CPB (Customs and Border Protection) for 15 years and my wife has been on my health care plan since the beginning. But now she is going to start working at the Post Office. I am 50 and she is 57. I want to retire at 60 and she will retire at 67.
How many years would she need to work to keep health care in retirement? My thought is that it would save us money in premiums if we both have individual coverage instead of family or self plus one option.
Answer 1
For your wife to be able to take health insurance on her own record into retirement then she’ll have to work at least 5 years.
Working for 5 years (and retiring above age 62) will allow her to get an immediate retirement as well.
Question 2
If I retire at the age of 62 but only have 15 years of service, what will my calculation percentage rate be?
Answer 2
For most FERS, their multiplier in their pension calculation will be 1% (and at 62 with 15 years of service this will include you).
The only exceptions are for those that have at least 20 years of service and retire at age 62 or later. These people will have a multiplier of 1.1% (10% higher).
Note: Special Provisions often have a multiplier of 1.7% but the rules for their retirement are different.
Question 3
Thank you for explaining retirement better than my agency. It has been very helpful. My question is are you eligible for the FERS supplement with a MRA+10 retirement?
Answer 3
The short answer is no, you are not. You can learn more about a MRA+10 retirement here.
Question 4
I cancelled my FEGLI years back due to me getting older and rates getting higher.But I did buy a 750k 30 year term policy from a private company.
I am 45 years old and I will be eligible to retire at 52 under the special provisions. I opted for this insurance so that when I retire I won’t have to elect a survivor benefit for my spouse. So if I die before my wife, even though she won’t receive my reduced pension, she’ll get the lump sum of 750k.
Does this make sense in your view? Also would she be receiving my social security after I pass?
Answer 4
Your strategy could work but I have some concerns. First, your life insurance is a 30 year term so at the latest (if you got it today) would last until you are 75. Would your wife be okay if you died after that?
Second, does your spouse have health insurance on her own? The reason I ask is that if you don’t give her a survivor benefit and you pass away first, she won’t be able to stay on the federal health insurance.
Third, the survivor benefit will increase with inflation overtime so it is very difficult to replace this benefit with life insurance.
And lastly, if your Social Security benefit is higher than her then yes she would get your monthly Social Security benefits but her would then go away.
