It is possible to increase the amount of a federal employee’s annuity by contributing any time spent on active duty in the armed forces during the past four weeks, as detailed in my blog entries. When reading this essay, you should better understand what happens to your heirs after you pass away. This is because it is essential to have a plan in place for your loved ones if you pass away or if you have a spouse or children who are economically dependent on you.
If you die while employed, you will get a survivor annuity
If you are insured by the Federal Employee Retirement
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In the event of your passing, this amount, together with a survivor annuity equal to 50 percent of what you would have received in a death-in-service pension if you had ten or more years of service, would be paid to your spouse as a pension benefit. Unmarried children under 18 are eligible for survivor benefits if they are not married. Applicants have no upper age limit if they are not married and cannot sustain themselves because of a condition that began before they were 18 years old.
This indicates that if CSRS covers you, your spouse will be entitled to receive 55% of your retirement pension. Any children who meet the criteria for receiving benefits under FERS would be eligible for survivor payments under this program. Survivor pensions for spouses and children are raised annually to account for the increased cost of living (COLA).
Survivor death paybacks
It is required by law to provide a former spouse with a full survivor annuity unless the former spouse gives a written and signed agreement waiving the right to any survivor annuity or accepting a reduced sum.
The FERS standards allow you to select a survivor annuity that is either fifty percent or twenty-five percent of your pension. Your basic annuity will decrease by 10% to get the full survivor annuity available through FERS. When combined with a partial annuity, the rate for a FERS annuity is 5%.
CSRS guidelines allow you to choose a survivor annuity of up to 55% of your standard annuity for a yearly amount as low as $1. Your annuity would be cut by around 10% to cover the cost of the latter benefit.
Suppose you opt to provide your beneficiary with a survivor annuity. In that case, that amount will increase annually to account for inflation and will be paid to your survivor for the remainder of their life if they do not remarry before age 55. The COLAs that you earn after you retire will be used to calculate an increase in your annuity payment.
Thrift savings and insurance coverage
Your partner is entitled to the money taken out of your Thrift Savings Plan account until you choose someone else to receive these payments or until a warrant is issued to assign these payments to whoever is appropriate, whichever comes first.
Benefits in terms of one’s health
If your spouse receives an annuity, you and any dependent children of your spouse can maintain that coverage. The amount of the annuity is irrelevant. This would be the case if your partner were previously covered by health insurance under either the Self Plus One or Self and Family choices. Even if you already have enough money in your annuity to pay the premiums, your partner may still choose to contribute to make up the difference.
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M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].
