Question 1
Can you do a video on whether the lump sum check for annual leave affects the FERS Supplement Earnings Limit?
Answer 1
Great question. There are a number of things that do not affect your FERS Supplement earnings limit. Any income you have from your job including your salary, an annual leave lump sum, or VSIP payment doesn’t affect your FERS supplement. Also, pensions, annuities, or investment income don’t count either.
The two main types of income that do count towards lowering your FERS supplement is income from a job or business.
Question 2
Thank you very much for your videos on federal retirement. Very helpful.
I have a question about Health insurance. My wife and I work for USPS. I plan to take the early-out retirement next month. Right now, my wife and my children are under my FEHB plan. I would like to know if it is possible to switch our family insurance plan to my wife so I can be under her plan during my retirement. If so, when can we change it? Before or after my retirement?
Also, what are your thoughts on paying for a survivor annuity vs. life insurance? Which is a better option?
Answer 2
Since you are both federal employees then you certainly can change it so that your health insurance is under your wife. And that probably would make the most sense so you can take advantage of the fact that she is still working and paying health insurance premiums pre-tax.
You can make that change before or after retirement.
For your second question, in my experience it is very difficult to replicate the survivor benefit with life insurance. The numbers normally just don’t make sense.
Question 3
Is it true that 2/3 of your FERS retirement gets subtracted from your Social Security? For example, if my FERS retirement would be $1500, $1000 would be subtracted from my potential Social Security income? A co-worker who will retire within the next couple years mentioned it to me and I was shocked since I never heard of it and no one ever mentions that piece of important information. Please advise. Thank you
Answer 3
Great question. So the short answer is no, your FERS pension is not going to reduce your Social Security. As a FERS employee you certainly can get your full Social Security while getting your FERS pension.
The most probable reason that this confusion came up is because federal employees in the old retirement system (CSRS) are subject to rules that often stop them from getting their full Social Security while drawing a CSRS pension.
