Question
I am planning on retiring in about five years. It is my intent to take a reduced annuity to ensure a survivor benefit for my spouse in case I should die first. I hit a deer earlier this week and it made me wonder what happened to my annuity if I die before I am receiving it? Is there any way I can ensure that she gets some of it?
Answer
This is a great question and one that all federal employees should consider.
And just to make sure everyone understands what we are talking about, here is the same question asked any multiple ways:
I’ll elect a FERS Survivor Benefit for my spouse at retirement but what if I die as an active federal employee. Does my spouse get anything then?
My spouse was a federal employee and passed away before retiring. Do I get any of their benefits like a pension or health insurance (FEHB)?
Let’s give some context to this question.
After Retirement
If someone passes away after retirement then things are pretty straight forward. If the federal employee spouse had elected a survivor benefit then the surviving spouse will receive a piece of their pension based on the survivor benefit that was elected.
Here is an article about the best survivor benefit options.
If you are a surviving spouse then here is information from OPM on what to do.
But a survivor benefit is only elected at retirement (on the retirement application) so what happens if a federal employee dies before they retire?
Before Retirement
A surviving spouse can be eligible for benefits based on a federal employee spouse’s career even if that federal employee spouse dies before retirement.
There are two types of pay that a surviving spouse can get: A lump sum and a monthly payment.
Lump Sum
To be eligible for the lump sum payment the federal employee spouse must have had at least 18 months of creditable FERS civilian service and have been married for at least 9 months.
But the 9-month requirement gets dropped if the death was caused by an accident or you had kids together.
The lump sum amount will be 50% of the federal employees pay plus a fixed amount (which is currently (at the time of writing) $32,423.56.
So if you salary was $100,000 then your spouse would get a lump sum of about:
$50,000 (50% of salary) + $32,423.56 = $82,423.56
Monthly Payment
For a surviving spouse to get a monthly payment the federal employee spouse would have had to have at least 10 years of service.
If that is the case, the monthly payment will be based on the federal employee’s length of service and high-3 salary at the time of death.
Here is a deeper explanation of your high-3 salary and years of service.
Basically, the surviving spouse is eligible to 50% of the payment the federal employee spouse had accrued so far in their career.
The formula normally looks like this:
Years of Service x High-3 Salary x 1% = Gross Annual Pension
So if you had 20 years of service and your high-3 salary was 100k then your numbers would probably look this:
20 x $100,000 x 1% = $20,000 Gross Annual Pension
But pensions are paid on a monthly basis (not annual), so your monthly pension would be:
$20,000 / 12 = $1,666.66 Gross Monthly Pension
But this number would be your full pension (as the federal employee) so a surviving spouse is only eligible for 50% of that. So a surviving spouse would get about:
$1,666.66 x 50% = $833.33 Gross Monthly Pension for Surviving Spouse
Conclusion
So overall, surviving spouses are often eligible for some sort of a benefit if their FERS federal employee spouse dies while still working but it probably won’t be a huge amount of money.
It is probably in your best interest to try to keep your spouse alive so they can work longer and accrue a bigger pension 🙂
