Category: Federal Health Insurance

Key Takeaways

• Many government workers assume they are retirement-ready, but gaps in timing, paperwork, and financial alignment can delay or disrupt the process.

• A successful retirement in 2025 requires updated planning, including understanding Medicare integration, TSP withdrawal rules, and annuity expectations.

The Retirement Picture Isn’t as Clear as It Used to Be

If you’re approaching retirement from public service in 2025, you might feel confident. After all, you’ve worked decades under the assumption that your pension, health benefits, and TSP would cover everything. But here’s the hard truth: many of the assumptions that made sense ten years ago no longer apply.

Retirement today involves more than just filing a few forms and waiting for your annuity. It requires strategic timing, coordinated decisions, and a clear understanding of how benefits like FEHB, Social Security, and the Thrift Savings Plan work together. The rules have changed, timelines have shifted, and new requirements make the transition far more complex than it once was.

Your High-3 May Not Be What You Think

The Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS) calculate your pension using your “high-3” average salary. But many government workers assume this figure includes all forms of pay. In reality, it excludes overtime, bonuses, and some locality pay, unless specifically included.

As of 2025, legislation is still under review that may redefine what counts toward retirement calculations. If locality pay is excluded, workers in high-cost areas could see lower annuity projections than expected.

You need to:

Your Retirement Date Affects More Than Your Pension

Retiring at the end of a pay period, month, or year isn’t just about clean bookkeeping. The exact date you retire can influence your first pension payment, annual leave payout, and COLA eligibility.

For example:

• FERS retirees who separate on December 31 may have their annuity start in January, but not receive their first full payment until February or March due to OPM processing delays.

• Retiring on the last day of a month ensures the annuity begins the very next day. Missing that cutoff pushes your benefit start to the next month.

The timing isn’t just about preference. It affects income flow.

Social Security Isn’t Always a Sure Thing

In 2025, the Social Security Full Retirement Age (FRA) for those born in 1963 is 67. But many government workers under FERS assume they should take benefits as early as 62.

Here’s the issue:

• Taking Social Security at 62 results in a permanent reduction of up to 30%

• The FERS Annuity Supplement ends at 62, even if you delay Social Security

• Income limits apply if you work while collecting early Social Security

If you claim too early without a backup income plan, you may limit your long-term benefit potential.

Medicare and FEHB: Coordination Is Now Mandatory for Some

Starting in 2025, Postal retirees and some other eligible groups must enroll in Medicare Part B to maintain PSHB (Postal Service Health Benefits) coverage. While this mandate doesn’t apply to all federal retirees, the trend is moving in that direction.

You should:

• Enroll in Medicare Part B when first eligible at 65, unless you are actively working

• Consider whether your FEHB plan offers coordination benefits like waived deductibles or Part B premium reimbursements

• Know that delaying Part B enrollment may trigger lifelong penalties unless you qualify for a Special Enrollment Period

This coordination is not automatic. If you ignore the requirement, you risk reduced coverage or higher out-of-pocket costs.

The TSP Isn’t a Passive Retirement Income Tool

Many government workers mistakenly treat the Thrift Savings Plan like a traditional pension. But unlike your annuity, the TSP requires active management after retirement.

In 2025, the TSP offers flexible withdrawal options, including:

However, mistakes are easy to make. For instance:

• Withdrawing too early (before age 59½) can trigger a 10% IRS penalty unless you qualify under the age 55 rule

• Failing to meet Required Minimum Distributions (RMDs) starting at age 73 leads to tax penalties

You need to create a withdrawal strategy that aligns with your income needs, tax situation, and market risks.

Survivor Benefits: One Decision, Permanent Impact

Your choice of survivor benefits affects both your monthly annuity and your spouse’s financial security after your death. You only get one chance to make this election at retirement.

Key facts:

• Electing a full survivor annuity (50%) reduces your pension by about 10%

• Choosing no survivor annuity disqualifies your spouse from continuing FEHB after your death

• You can’t change your decision after retirement unless your spouse dies or you divorce and remarry

This is not a checkbox on a form. It’s a permanent commitment with long-term consequences.

Don’t Overestimate Your Annual Leave Payout

Many government employees count on a substantial payout from unused annual leave. But several factors can reduce this expected windfall:

• The payout is based on your hourly rate, not your high-3

• Leave caps apply (typically 240 hours for most employees)

• The payout is taxed as income and may affect your tax bracket

You may also face a delay of several pay periods before receiving your leave check. Planning around this money without a buffer could create a cash-flow gap.

COLAs Aren’t Guaranteed to Keep Pace With Reality

Cost-of-living adjustments (COLAs) apply differently depending on your retirement system:

• FERS retirees receive partial COLAs: only the full amount if inflation is 2% or less, and less than full if it exceeds 2%

• CSRS retirees receive full COLAs, but CSRS covers fewer employees today

In 2025, the COLA increase is 2.5%, offering moderate relief, but not fully covering the recent inflation surges.

You should not assume your purchasing power will remain steady. Budgeting for a gap between inflation and your COLA is a wise move.

Forms and Processing Delays Can Derail the Best-Laid Plans

Even if everything is in place, your retirement can be delayed or disrupted by errors in paperwork or OPM processing times.

In 2025:

• Retirement application processing still averages 60 to 90 days

• Common delays occur from missing signatures, outdated beneficiary forms, or incomplete service credit documentation

To reduce these risks:

• Submit your retirement application at least 90 days before your intended retirement date

• Review your OPF (Official Personnel Folder) annually during your last five years of service

• Update your designations of beneficiary for life insurance, TSP, and unpaid compensation

What You Should Be Doing Right Now

If you’re within five years of retiring, take these steps immediately:

• Request a full retirement estimate from your HR or agency benefits officer

• Create a timeline that includes projected retirement date, Medicare eligibility, TSP withdrawal start, and Social Security claim window

• Check if your FEHB plan requires or benefits from Medicare enrollment

• Schedule a financial planning session with someone familiar with public sector retirement

These steps aren’t optional. Retirement is no longer a passive milestone—it’s an active transition that demands precision.

The Rules Keep Changing

Public sector retirement is not static. Each year brings potential changes to policies, benefits, and timelines. For example:

• Proposed changes to the FERS contribution rate could increase how much you must pay toward your pension

• Discussions around reducing the government’s FEHB contribution may increase your healthcare premiums in retirement

• RMD rules and TSP withdrawal limits are evolving as life expectancy tables adjust

You must stay engaged even after retirement to avoid costly surprises.

Retirement Success in 2025 Requires More Than Tenure

If you feel ready to retire based solely on your years of service, that confidence may be premature. Modern retirement readiness involves:

The stakes are too high to leave any of this to chance.

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Get Serious About Your Retirement Readiness

Retiring from public service in 2025 means entering a more complex benefits environment than ever before. Your pension, health insurance, and TSP will only work for you if they are aligned and planned carefully.

Don’t rely on outdated assumptions or one-size-fits-all calculators. Instead, speak with a licensed professional listed on this website who understands your specific agency rules, benefit interactions, and financial goals. They can help you verify that your readiness isn’t just hopeful — it’s real.

Key Takeaways

• While law enforcement officers (LEOs) can retire earlier than most public employees, this benefit comes with lesser-known financial and healthcare tradeoffs that can catch retirees off guard.

• The FERS Special Retirement Supplement ends at age 62, potentially creating a retirement income gap for LEOs who don’t plan for the switch to Social Security.

The Appeal of Early Retirement in Law Enforcement

One of the most attractive features of a law enforcement career is the opportunity to retire early. Under the Federal Employees Retirement System (FERS), law enforcement officers, along with firefighters and air traffic controllers, are considered special category employees. You can retire with a full pension as early as age 50 with 20 years of qualifying service, or at any age with 25 years of qualifying service. This accelerated timeline reflects the physically demanding and high-risk nature of your work.

However, early retirement comes with a set of assumptions that, if misunderstood or unplanned for, can jeopardize your long-term financial stability. Simply retiring early doesn’t mean retiring worry-free.

As a special category employee, your pension under FERS is calculated differently during your first 20 years of service:

This makes it more generous than the standard FERS formula, which offers 1.0% (or 1.1% if retiring at 62 with 20 years) across the board. If you leave after exactly 20 years at age 50, you’re entitled to 34% of your high-3 average salary. But if you serve an extra five years, the jump is modest—just 5% more. That’s a tradeoff: higher early benefits, but slower increases if you extend your career.

Special Retirement Supplement Ends at 62

You are eligible for the FERS Special Retirement Supplement (SRS) if you retire before age 62 and meet the criteria for an immediate annuity. The SRS is designed to replicate the Social Security benefit you would receive at 62—based on your federal service alone.

But here’s the catch: The supplement stops at age 62, regardless of when you claim Social Security. If you delay claiming your Social Security benefit for a higher payout (which you can do until age 70), you’ll need to fill the income gap from your savings, your Thrift Savings Plan (TSP), or other sources.

Mandatory Retirement Age: A Double-Edged Sword

As a law enforcement officer, you’re subject to mandatory retirement at age 57 if you’ve completed 20 years of service. This rule ensures that agencies maintain a physically fit workforce—but it can cut your earnings potential short.

If you entered federal service late in life, this could mean you’re forced out before reaching your maximum earning or saving potential. While you might be eligible for retirement, you may not feel ready financially. Planning ahead is essential.

What Happens to FEHB?

One of your biggest concerns post-retirement might be health coverage. If you’re enrolled in the Federal Employees Health Benefits (FEHB) Program and have been for the five years before retirement, you can carry it into retirement. The government continues to pay a large share of your premiums, typically around 70%.

But if you retire in your early 50s, you’ll be paying FEHB premiums out-of-pocket until you’re eligible for Medicare at age 65. That’s over a decade of potentially rising healthcare costs. Some retirees find this financially burdensome, especially when combined with reduced income post-retirement.

Medicare and Coordination—Not Automatic

Once you reach age 65, Medicare becomes your primary insurer, and FEHB serves as secondary coverage if you keep it. But be aware:

• You must actively enroll in Medicare Part B to coordinate coverage.

• You’ll pay Part B premiums on top of your FEHB premiums.

This dual-premium setup offers strong coverage but adds to your monthly costs. Many LEO retirees don’t fully understand this dynamic until it arrives. If you don’t enroll in Medicare Part B when first eligible, you may face late enrollment penalties and gaps in coverage.

The TSP Factor in Early Retirement

Because your pension and SRS may not fully cover your needs—especially between ages 57 and 62—your Thrift Savings Plan (TSP) often becomes a vital income source.

LEOs are eligible for penalty-free withdrawals from the TSP as early as age 50 if they retire in the year they turn 50 or later. This rule provides flexibility, but:

It’s essential to structure your TSP use wisely to bridge the gap between the end of the Special Retirement Supplement and the start of Social Security.

Survivor Benefits—Know Your Options

When you retire under FERS, you can elect survivor benefits for your spouse. To keep your FEHB coverage going for a surviving spouse, you must:

Survivor benefits reduce your monthly pension, but skipping them could leave your spouse without coverage or income. This is a decision worth discussing with a licensed professional.

Retiring Early Doesn’t Mean Escaping Inflation

Your FERS annuity receives Cost-of-Living Adjustments (COLAs), but early retirees face a limitation. If you retire under age 62, you don’t receive COLAs until you turn 62. That means the value of your annuity could erode over time, especially in high-inflation periods.

You’ll need to factor in this delay and ensure your savings, TSP investments, and supplemental income sources can support rising living costs during this gap.

Disability and Early Retirement—A Misunderstood Area

Some LEOs consider disability retirement as an alternative to standard retirement if they’re injured or face chronic conditions. But disability retirement has its own rules:

• You must apply before you separate from federal service

• Approval requires medical documentation and agency certification of your inability to perform your duties

If you qualify, you may receive 60% of your high-3 average for the first year, then 40% thereafter (offset by Social Security disability benefits). But this is not a guaranteed fallback—you must meet strict eligibility.

Planning Is the Most Critical Asset

Early retirement is possible, but not without planning. You must address questions such as:

• How will I replace the Special Retirement Supplement after 62?

• Can my TSP and savings cover over a decade of FEHB premiums before Medicare?

• What if inflation erodes my annuity before I get COLAs?

These are complex questions that deserve informed answers.

Before You Hand in the Badge

The ability to retire early under FERS is a meaningful benefit—but it comes with obligations that aren’t always visible on the surface. Understanding how your pension, FEHB, TSP, Medicare, and Social Security benefits intersect is critical to making your retirement sustainable.

Don’t wait until the gaps appear. Speak with a licensed professional listed on this website to create a tailored plan that secures your benefits and protects your family.

Key Takeaways

• Survivor benefits can provide crucial financial security for your loved ones after your passing, but understanding eligibility and payment structures is essential.

• Failing to plan ahead, including electing the right survivor benefit options, could significantly impact your spouse or dependents in the future.

Survivor benefits play a major role in ensuring your family has financial stability

after your death. As a government employee or retiree, you have access to these benefits, but knowing how they work and what choices you have is crucial. This guide breaks down the key points so you can make informed decisions about your retirement and legacy.

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1. How Survivor Benefits Work Under Your Retirement System

Your survivor benefits depend on the retirement system you are covered under: the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS). Each system has its own rules and payout structures.

FERS Survivor Benefits

Under FERS, survivor benefits are available to your spouse and dependents if you pass away before or after retirement. There are three main types:

• Basic Employee Death Benefit (BEDB): Your surviving spouse is entitled to a lump sum payment and a portion of your final salary. This applies if you had at least 18 months of creditable service.

• Survivor Annuity: If you had at least 10 years of creditable service, your spouse may receive a monthly annuity equal to 50% of your earned pension.

• Children’s Benefits: Eligible children may also receive a monthly annuity, which varies depending on factors like Social Security eligibility.

CSRS Survivor Benefits

CSRS retirees can elect a survivor annuity, which typically provides a spouse with 55% of the retiree’s pension. Unlike FERS, CSRS does not offer Social Security benefits, making the survivor annuity a crucial financial source for spouses.

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2. The Cost of Electing a Survivor Annuity

Electing a survivor annuity reduces your retirement income but ensures financial protection for your spouse. Here’s what you need to consider:

• Under FERS, the reduction in your annuity is 10% for a full survivor annuity (50% benefit) or 5% for a partial survivor annuity (25% benefit).

• Under CSRS, the reduction is approximately 10% of your pension to provide a 55% survivor annuity.

If you decline the survivor annuity, your spouse must provide written consent. Opting out can be risky, as it may leave your spouse without long-term financial support.

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3. The Effect of Remarriage and Age on Survivor Benefits

Your survivor’s eligibility and benefits can change based on their age and marital status.

• Remarriage Before Age 55: If your spouse remarries before turning 55, they may lose eligibility for the survivor annuity unless they later become single again.

• Surviving Spouses Over 55: A surviving spouse who remarries after age 55 retains full survivor benefits.

• Children’s Benefits: Dependent children typically qualify until age 18 (or 22 if still in school). If a child is disabled before age 18, they may qualify for lifetime benefits.

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4. Life Insurance and Survivor Benefits – How They Work Together

Survivor annuities may not always be enough, so many government employees supplement them with life insurance. If you’re covered under the Federal Employees’ Group Life Insurance (FEGLI) program, your beneficiaries may receive a lump sum payment to help with immediate expenses.

Here’s why life insurance matters:

• Survivor annuities offer long-term financial support, but they may not cover all costs.

• Life insurance provides immediate financial assistance to cover debts, funeral costs, and other urgent needs.

• If you opt out of a survivor annuity, life insurance could be your spouse’s only source of financial protection.

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5. What Happens to Survivor Benefits If You Pass Away While Still Working?

If you die while still employed by the government, your survivors may qualify for benefits based on your length of service.

• Less than 18 months of service: A refund of your retirement contributions is provided to your survivors.

• More than 18 months but less than 10 years: Your spouse may receive the Basic Employee Death Benefit (BEDB).

• More than 10 years of service: Your spouse qualifies for a survivor annuity based on your earned pension.

It’s essential to keep your beneficiary designations updated so your benefits go to the right people.

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Making the Right Choice for Your Family’s Future

Understanding your survivor benefit options is critical to ensuring your loved ones are financially secure. Government employees have valuable benefits, but planning ahead is key to making the most of them. Whether you choose a full survivor annuity, supplement with life insurance, or explore other options, taking proactive steps can make all the difference.

For guidance on your survivor benefits, talk to a licensed agent listed on this website. They can help you evaluate your choices and secure the best possible outcome for your family.

Key Takeaways

• Fixed annuities provide guaranteed returns and protect your principal investment, making them a safe choice if you’re risk-averse.

• Understanding key features like surrender charges, payout options, and interest rates can help you make informed decisions that match your retirement goals.

Guaranteed Returns: Why Stability Matters

When you’re looking to secure your financial future, stability often comes first. Fixed annuities offer you exactly that—predictable, guaranteed returns. Unlike other investments that can fluctuate wildly based on market conditions, fixed annuities promise a consistent interest rate for a defined period, typically ranging from 3 to 10 years. Once set, this rate doesn’t change, ensuring you always know exactly how much your investment will earn.

The assurance of a fixed return means you won’t have to stress over market downturns or unexpected losses. You can plan your retirement budget accurately, knowing your returns won’t vary due to economic changes. Keep in mind, though, while your returns are stable, they might be lower compared to potentially higher-risk investments like stocks.

Understanding the Interest Rate: The Core of Fixed Annuities

Initial Interest Rate Period

When you first invest in a fixed annuity, you’ll receive an initial interest rate guaranteed for a specific duration, typically ranging between 1 and 10 years. This initial rate often tends to be higher to attract investors, but it might reset to a lower rate afterward. Always pay close attention to how long your initial rate lasts and what happens once this introductory period ends.

Renewal Rates

After your initial period expires, your annuity provider typically sets renewal rates annually. Renewal rates can vary depending on prevailing market interest rates, but they typically won’t drop below a guaranteed minimum outlined in your annuity contract. This floor rate ensures your investment remains protected, though the exact earnings might fluctuate slightly year by year.

Surrender Charges: The Price of Early Withdrawal

What Are Surrender Charges?

Fixed annuities are designed to be long-term investments, usually meant to last at least 5 to 10 years or even longer. If you withdraw your money prematurely—typically within the first 7 years—you’ll likely encounter surrender charges. These charges are fees your provider deducts from your withdrawal amount, typically starting around 7-10% and decreasing gradually each year you hold the annuity.

Planning Around Surrender Periods

Since surrender charges diminish over time, it’s wise to carefully plan your withdrawal strategy. Make sure your financial needs align with the annuity’s surrender schedule. If you anticipate needing early access to your funds, consider annuities with shorter surrender periods or other financial products entirely. The key is to avoid costly surprises down the road.

Tax Advantages: Grow Your Investment Efficiently

Tax-Deferred Growth

One of the appealing features of fixed annuities is their tax-deferred growth. This means your investment accumulates interest tax-free until you start making withdrawals. Unlike regular savings accounts or CDs, where you’re taxed annually on the interest earned, fixed annuities allow your investment to compound more rapidly. Your money grows quicker because you’re earning interest on the entire amount, including what would have otherwise gone to taxes.

Taxes Upon Withdrawal

While the tax-deferral advantage is beneficial, remember that when you eventually withdraw your funds, you’ll pay ordinary income tax rates on the accumulated earnings. Planning withdrawals strategically—especially during retirement when your income might be lower—can help minimize your overall tax liability.

Payout Options: Tailoring Your Retirement Income

Lifetime Income Payments

Choosing lifetime income payouts can provide you with guaranteed payments for the rest of your life, regardless of how long you live. This security can be comforting, particularly if you’re concerned about outliving your savings. Options typically include single-life payouts or joint-life payouts, which continue providing income to your spouse if you pass away first.

Period Certain Payouts

If lifetime payouts aren’t ideal for your situation, fixed annuities also offer “period certain” payouts. With this option, you receive guaranteed payments over a fixed duration—say 10, 15, or 20 years. If you pass away before the payout period ends, your named beneficiaries continue receiving payments until the predetermined period concludes.

Lump-Sum Withdrawals

Alternatively, you might choose a lump-sum withdrawal, taking the entire accumulated value at once or over a few significant installments. While this grants immediate access to your funds, be cautious about potential tax consequences, as receiving a large amount at once could push you into a higher tax bracket for that year.

Beneficiary Protection: Securing Your Legacy

Naming Beneficiaries

A crucial yet sometimes overlooked feature of fixed annuities is the ability to designate beneficiaries. Clearly naming beneficiaries ensures your annuity’s remaining balance directly transfers to your loved ones upon your passing, bypassing probate and avoiding lengthy legal processes.

Avoiding Probate

Beneficiary designation helps your heirs quickly access funds without the delays and expenses associated with probate. This immediate access is particularly helpful in covering end-of-life expenses or ensuring financial stability for your beneficiaries without interruptions or costly delays.

Flexible Inheritance Options

Your beneficiaries typically have flexible options for receiving inherited annuity funds. They might take a lump-sum payment, opt for continued periodic payments, or potentially transfer the annuity into their own retirement planning, maintaining tax-deferred growth. Discussing these options beforehand with your beneficiaries can streamline their decision-making during a challenging time.

Fees and Costs: Hidden Expenses You Should Consider

Understanding Fees

Fixed annuities typically have lower fees compared to variable annuities, but they’re not entirely fee-free. Some common costs include administrative charges, contract fees, or charges for optional riders (additional features like inflation protection or long-term care). These fees might seem minor initially but can significantly impact your total returns over the lifetime of your investment.

Comparing Costs

Always compare different annuity products, asking specifically about fees and expenses. A lower-rate annuity with minimal fees might sometimes be more advantageous than one offering slightly higher rates but loaded with hidden charges. Getting a clear understanding upfront can save you thousands over the life of your annuity.

Making the Right Decision for Your Future

Investing in a fixed annuity is about aligning your personal financial goals with a product offering security, stability, and predictability. Before committing, take the time to thoroughly understand interest rates, payout methods, fees, surrender charges, and tax implications. The right annuity should complement your retirement plans, giving you confidence and peace of mind as you approach retirement age.

Explore your options carefully, and don’t hesitate to seek professional guidance. A little preparation today can significantly enhance your financial security tomorrow.

Key Takeaways

• Electing a survivor benefit is the only way to ensure your spouse continues to receive a portion of your federal annuity after your death.

• Failing to elect this benefit at retirement—or removing it later—can result in permanent financial loss for your spouse, with limited options for correction.

Understanding the Survivor Benefit Election

When you retire under the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS

), you must make a crucial choice: whether or not to elect a survivor annuity. This decision directly affects whether your spouse receives any retirement income after your passing.

The survivor benefit provides your spouse with a portion of your monthly annuity—up to 50% under FERS and up to 55% under CSRS. But it only works if you elect it in writing at retirement.

Why the Decision Matters More Than You Think

If you do not choose a survivor benefit when you retire—or cancel it after retirement—your spouse is left without ongoing income from your annuity. That means no guaranteed monthly payments, no cost-of-living adjustments, and no continued access to certain health benefits.

For many retirees, this oversight isn’t discovered until it’s too late. And by then, even a legal will cannot override your original retirement election.

Timeline: When and How You Must Elect It

You must make the survivor benefit election at the time of retirement. The Office of Personnel Management (OPM) requires this decision on your retirement application (SF 3107 for FERS, SF 2801 for CSRS). You may:

• Elect a full survivor annuity, which reduces your own monthly annuity by about 10% but gives your spouse up to 50% of your annuity after you die.

• Elect a partial survivor annuity, which reduces your annuity by approximately 5% and provides up to 25% to your spouse.

• Choose no survivor annuity, but only with your spouse’s notarized written consent.

What Happens If You Skip the Election?

If you retire and fail to elect a survivor benefit—and your spouse does not provide written consent—OPM will automatically reduce your annuity to cover a full survivor benefit. This is designed to protect your spouse by default.

But if you are not married at retirement, no reduction is made, and no survivor benefits will exist unless you later marry and take steps within two years to elect a new survivor annuity.

The Two-Year Window After Marriage or Remarriage

If you marry after retirement, you can still elect a survivor benefit for your new spouse—but you must do so within two years of the marriage. This election requires:

• A written request to OPM

• An actuarial reduction in your annuity

• Possibly repaying the difference in benefits that would have been withheld had the election been made earlier

Missing this two-year window means your spouse will not be eligible for a survivor benefit—ever.

Divorce Complicates the Equation

If you divorce after retirement, your survivor election can be affected in several ways:

• If you had elected a survivor benefit for your now ex-spouse, it is automatically cancelled unless a court order mandates its continuation.

• If you remarry, the new spouse is not entitled to the survivor benefit unless you submit a new election within the required time.

• A divorce court order can grant your former spouse a survivor annuity even if you do not want them to have one, and this can reduce your annuity.

Reviewing your divorce decree and coordinating with OPM early is essential to ensure there are no surprises.

Survivor Benefits and Health Insurance Access

Under FERS and CSRS, continued health insurance coverage through the Federal Employees Health Benefits (FEHB) Program depends on electing a survivor annuity. If your spouse does not receive a survivor benefit, they cannot continue FEHB coverage under your record after your death.

This detail is often overlooked, but it can leave your spouse without health insurance when they may need it most.

Cost vs. Security: Is It Worth Electing?

While it’s true that electing a survivor annuity reduces your monthly retirement income, that reduction provides significant peace of mind:

• Your spouse receives guaranteed monthly payments for life.

• The payments are adjusted for inflation through cost-of-living increases.

• Health benefits can be preserved.

If you forgo the survivor benefit to increase your own annuity, the short-term gain could result in long-term loss for your spouse.

Making Changes After Retirement: What Are the Limits?

After retirement, your ability to make changes to the survivor benefit election is extremely limited. You may:

• Cancel a survivor election only with your spouse’s written and notarized consent

• Add a new survivor after marriage or remarriage within two years

• Comply with a court order in divorce to maintain or assign a survivor benefit

You cannot:

• Add a survivor benefit for a spouse after two years have passed since your marriage

• Reinstate a survivor benefit after canceling it (unless tied to divorce or death of the original spouse)

What If Your Spouse Passes First?

If your spouse dies before you, your survivor annuity deduction stops—but you do not automatically regain all the funds previously withheld. You will receive your full annuity going forward, but past reductions are not refunded.

You should notify OPM immediately upon your spouse’s death so they can adjust your annuity accordingly.

Planning Ahead to Protect Your Family

You should start discussing survivor annuity options well before your retirement date. Consider the following steps:

• Estimate your spouse’s future needs, especially if they do not have their own pension or substantial savings

• Weigh the cost of reducing your annuity against the financial protection it offers

• Confirm your election choice with your spouse, and discuss it with a licensed professional if necessary

The right decision often depends on the specifics of your household finances, health, age difference, and whether your spouse has access to other income streams.

Don’t Leave It to Chance—Your Family’s Security Depends on It

Failing to elect a survivor benefit—or waiting too long to correct a misstep—can jeopardize your spouse’s financial future and healthcare access. The rules around elections, deadlines, and eligibility are strict, and exceptions are rare.

If you’re nearing retirement or reviewing your benefits, now is the time to make informed decisions. Speak with a licensed professional listed on this website to help you evaluate your options and avoid costly mistakes.