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FREE At Last – The Good, Bad, and Inevitable of Turning 65

Posted on Friday, 9th May 2014 by

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Turning 65 often proves to be a pivotal year for retirees.  I’ll be 65 next month and discovered many tasks await us at this juncture in our lives. There are many things to consider and first and foremost I’m grateful that I made it to this milestone; many don’t, including my parents and grandparents on my father’s side. None of which lived long enough to collect Social Security.  

Starting this month my FEGLI is FREE and my monthly annuity payment will increase by the amount of my previous FEGLI premium. I elected the 75% reduction when I retired in 2005 and paid the monthly premiums for the past 10 years.  During those 10 years I retained full coverage that equaled my base pay plus $2,000. Over the next 36 months or so the coverage drops 2% per month until it reaches 25% of the original value.

Speaking of free, in the previous article I discussed final arrangements and talked about the veteran’s National Cemetery burial benefit. My wife and I finalized our plans and decided to take advantage of this program which can save veterans and their spouses close to $10,000 in burial costs.  Two of my cousins, my brother, and other family members and friends will eventually be there as well. Of course I hope that my heirs won’t be able to take advantage of this benefit for many years to come. I at least wrote down our wishes and checked off another item on my to-do list. Strangely enough my to-do list never seems to get smaller even though I keep checking off item after item. I suppose that’s a good thing, adding new actions that need to be done, proving that I’m not content to just sit on the sideline.

Medicare is the next item on my list. You have a 7 month window starting three months before your 65th birthday to apply without a penalty. I decided to apply in the 7th month because I converted one of our retirement accounts to a ROTH two years ago. Social Security obtains your Modified Adjusted Gross Income (MAGI) from the IRS each year. The problem is that Social Security’s information can be from income tax returns that are up to two years old. If I wait until August Social Security may have updated income figures from the IRS. Your part B premiums are based on your (MAGI) and they can more than double if you don’t time ROTH conversions, TSP withdrawals, and/or capital gains properly.

If you apply for Medicare and your Part B premium is based on a higher MAGI you can file a Medicare Income Adjustment SSA-44 form. This form allows you to submit recent tax returns and other documentation that support a lower income than Social Security estimated.  Another reason for the delay on my part is that it takes about 2 months from the date you apply for Medicare to go into effect. Therefore I’ll save about 5 to 6 months worth of Part B premiums. Our FEHB plan will remain primary until Medicare kicks in. I debated for months whether or not to apply for Part B and after much research and thought decided it made sense for me and my family.  The vast majority of retirees elect Part B and for good reason.  Review my Medicare and Part B article for additional information on this subject. NARFE members can also visit the NARFE web site and read Tammy Flanagan’s excellent article on this subject. 

The good thing about turning 65 is that I turned 65 and that my wife and I are still able to do pretty much what we like to do, with limitations of course.  The bad and inevitable part is that I still think I’m in my forties when it comes to projects and I frequently bit off more than I can now chew. For example, I love to work on home projects and over the years I’ve landscaped 5 properties planting hundreds of trees and shrubs plus built patios, decks, room editions, and so much more. Now, after three hernia surgical repairs and knee surgery I can’t physically take on those projects anymore without contracting much of it out.  Inevitable, YES but the good thing is that I can still do the planning but now have to pay someone else to do the work I use to enjoy.  Such is life.  

Learn more about your benefits,  employment, and financial planning issues on our site and visit our Blog frequently at https://fedretire.net to read all forum articles.

Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Final Arranagements – Funeral & Burial Options (Part 2)

Posted on Friday, 25th April 2014 by

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Updated 2/20/2024

My Aunt Pauline and Uncle Jack preplanned their final arrangements in their early 50s. Uncle Jack had several major heart attacks in his mid 40s and thought for sure he would be the first one to go.  He lived to 81 and my aunt passed away a year before he died. They purchased graves and had the headstone placed on the graves and engraved with their names and birth dates.

When my aunt passed first the cemetery had a stone mason add the date.  After Uncle Jack died, he was a world war II veteran, I contacted the VA and had a military marker placed at the foot of his grave. I think My aunt and Uncle would have appreciated that.

National Cemeteries

If you or your spouse is a veteran both of you can be buried at a national cemetery. The government pays for the cost of the grave and internment. Your local funeral director will assist with the arrangements. My cousin’s husband was buried at the National Cemetery in Washington County PA and the grounds are beautifully maintained in a quiet country setting.

Veteran’s burial benefits include a gravesite and vault in any of our 131 national cemeteries with available space, opening and closing of the grave, perpetual care, a Government headstone or marker, a burial flag, and a Presidential Memorial Certificate, at no cost to the family.

Cremated remains are buried or interned in national cemeteries in the same manner and with the same honors as casketed remains.

Burial benefits available for spouses and dependents buried in a national cemetery include burial with the Veteran, perpetual care, and the spouse or dependents name and date of birth and death will be inscribed on the Veteran’s headstone, at no cost to the family. Eligible spouses and dependents may be buried, even if they predecease the Veteran.

Options / Price Comparisons

To compare costs, I visited several cemeteries in the area to obtain quotes for two graves, vaults, and internment fees. Prices for these items ranged from a low of $9,000 to $14,870 in 2014 not counting funeral arrangements and headstones. Prices are higher in 2024 and closer to $13,500 to $20,000. Two can be interned in one grave with a deeper vault.

We first visited our local funeral home in February of 2017 and the price for their services including casket, embalming, hearse, a short religious service at the home, with a half day viewing was $7,745 per person. When I went back on August of 2023 the price increased to $9,995. A 23 percent increase over a five-year period.

The majority of the increase was the cost of the casket, it increased from $2,565 to $3,730! I just may have to order our caskets from Costco and store them in our basement, just kidding!

Adding the grave site and funeral services together for a couple is an astounding $30,000 to $40,000 for two burials depending on the options you choose! You can see why veteran’s frequently select the national cemetery option which reduces their final arrangement costs appreciably.




Cremation

Cremation is generally less expensive; However, cremation costs can be high depending on how it is arranged. For example, embalming may be required for extended viewings unless you elect to do the cremation before the viewing and simply display the urn.

A grave or niche may be needed  for cremated remains while others spread the ashes of a loved one at a location that held special meaning for the deceased.

The Process

Executors or trustees of an estate would follow your final arrangement plans at the time of death. It makes things much easier if they have your detailed final arrangement plans that identify the services and burial location desired. It makes sense to purchase the grave site or crypt ahead of time, arrange for funeral service’s insurance or meet with a local funeral home to set up a plan for when the time comes.

At a minimum, prepare a list of your wishes. The goal is to have a plan showing where you wish to be buried, data collected that will be needed by the funeral home for the death certificate and notices, the desired ceremony, viewings, grave site, and funds either set aside or prepaid.

I originally prepared our wills, powers of attorney using WillMaker Plus by Intuit.  This software package offers a detailed final arrangement document that you can keep with you wills and other documents.

I met with a local funeral home and selected the services desired and they kept a copy for their records. When the time comes our family would contact them to set everything we preplanned into motion.

Plan Contents

Most funeral homes will provide final arrangement booklets or forms for you to use and many funeral directors will maintain a copy on file for your heirs. Another option is to complete a basic plan by outlining the following areas for each party and adding it to your estate plan and paperwork:

  • Personal Information (Address, occupation, schools attended, Military Service, and organizations that you belong to) for you and your spouse.
  • Veterans must have a copy of their DD-214 discharge paperwork if they decide to take advantage of the national cemetery option. To obtain a copy of your DD-214 form visit the National Archive site to request a copy online , by mail or fax. You can Fax a SF-180 form to them at 314-801-9195. For those without internet access call their customer service center at 1-866-272-6272 for assistance. They can send the forms.
  • Family information (Parents names, addresses and birthdates,  including your mother’s maiden name, brothers, and sisters)
  • Other Relatives and Friends (Relationship, names, addresses, and phone numbers)
  • Emergency Contacts
  • Organization Affiliations
  • Insurance Policies
  • Cemetery Arrangements (Location, contact number, etc.)
  • Final Arrangements (Church, funeral home preference, and specifics such as casket, flowers, organist, clothing, etc.)

I reviewed an excellent book on this subject titled Ahead of Your Time, A complete Guide to End-of-Life Planning several years ago that you may find helpful.  It is still available, easy to read and only 100 pages of which 30 are devoted to entering the information needed for your personal plan.

Our Decision

We were considering burial at the local national cemetery, it is about 20 miles from our home, or purchasing a crypt at a local cemetery mausoleum just three miles down the road and not far from our church. The cost for a mausoleum crypt is about on par with a standard in-ground burial. For example, you don’t need a vault or headstone and the headstone alone for a standard grave can cost from $2,000 to $8,000 or more.

One note of caution, when I said that burial in a mausoleum can be less expensive that holds true generally if you purchase it ahead of time. They offer a considerable preplanning price reductions as an incentive to purchase ahead of time. In our case the preplanning cost savings were $3,700. We decided to pay for the local crypt.

Summary

If you decide to take advantage of the veteran’s burial benefit review the funeral director’s proposal carefully. Most funeral directors have standard packages prepared and may inadvertently have charges in the proposal that would not be required for burial at a national cemetery.  For example, most funeral packages include the vault and other grave site services. Make sure these charges are not included.

I believe most tend to put final arrangements off as long as possible and for me it was about time to settle on our “forever home.” The cost of the crypt we purchased was paid off in 7 years through a no interest loan, one we couldn’t pass up.

Review Part 1 of this series if you missed it when first posted.

Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial or human resource professional where appropriate.

Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Posted in ANNUITIES / ELIGIBILITY, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE

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Are Your Loved Ones at Risk – Final Arrangements (Part 1)

Posted on Wednesday, 9th April 2014 by

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Updated 2/20/2024

The first part of this series discusses how to ensure your heirs receive what you intended and Social Security’s death and survivor benefits. Part 2 will discuss pre-planning steps that will assist the surviving spouse and children navigate the many challenges that arise when a loved one dies.

The subject matter may seem uninviting but I can assure you that your surviving family members will appreciate your efforts and they will be far less stressed when the inevitable happens. By developing a simple outline of you and your spouse’s preferences now, you can smooth the way for your loved ones even in death.

Establishing the Plan

When I was scheduled for surgery, I updated our survivor’s binder and estate plans for the third time since retiring. This time around I felt it necessary, for the first time, to research and establish our final arrangements.

You often hear horror stories about ex-spouses receiving estate assets because the deceased neglected to update beneficiary forms and gieving survivors are often talked into unnecessary and expensive funeral arrangements. We are all caught off guard when a loved one dies so why not take care of these issues ahead of time.

The Earlier the Better

Gregory, an engineer in his mid 30s, passed away while working at our office back in the 1980s and his wife had considerable difficulty collecting his benefits because he neglected to update his beneficiary forms after they married. We worked with his wife to help her as best we could.

A HR specialist, with first-hand experience in these matters, advised me that “every year we have a spouse and/or children who do not receive certain benefits because the employee failed to update the beneficiaries.”  Everyone should verify that their beneficiary forms are up-to-date or submit a new form to ensure your heirs receive what you intended.

Much of your estate and  assets won’t pass to your heirs through your will.  Assets such as  IRAs, life insurance policies, and annuities including bank accounts that you designated payable or transfer-on-death are distributed to named beneficiaries. If beneficiaries aren’t listed, assets are distributed according to the Federal Order of Precedence.

It’s a good practice to review your beneficiary forms and designations periodically and especially after you marry, get a divorce, and after a child’s birth or the death of a family member.




Other Considerations

Besides a surviving spouse’s annuity and FEGLI insurance payments there are other survivor and death benefits available from Social Security. A surviving spouse or child may receive a special lump-sum death payment of $255 if they meet certain requirements.

Generally, the lump-sum is paid to the surviving spouse who was living in the same household with the employee or annuitant when he or she died. Survivors must apply for this payment within two years of the date of death.

When you die, certain members of your family may be eligible for Social Security survivors benefits. These include widows, widowers (and divorced widows and widowers), children and dependent parents. Your widow or widower may be able to receive the deceased’s full benefit at their full retirement age. The full retirement age for survivors is age 66 for people born in 1945-1956 and will gradually increase to age 67 for people born in 1962 or later.

Reduced widow or widower benefits can be received as early as age 60. If your surviving spouse is disabled, benefits can begin as early as age 50.

Part 2 of this series will discuss final funeral and burial arrangement costs and options. I’m presently preparing our plan and there are many things to consider.  The key is a written plan that outlines your  wishes and you can be as detailed as desired.  I’ll also discuss the National Cemeteries in the next article. Veterans and their spouses are eligible for free burial and internment at 131 cemeteries nationwide.

Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. 

Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Posted in BENEFITS / INSURANCE, ESTATE PLANNING, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Where You Were When! The Beginning of A Retirement Journey

Posted on Saturday, 22nd March 2014 by

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I recall a bleak winter day in the late Sixties when I heard that Stanley, a childhood friend, died in Vietnam  after only 3 weeks in country.  I was on a school bus when I heard the news and many were shocked that he was gone and never to return.  Stanley, an energetic, friendly, and hard working young man, quit high school in his Junior year to join the Army with his parents consent.  I received my draft notice a few weeks earlier and was scheduled for my physical at the time. I was more than a little concerned about my prospects and future. Yet, like so many others did during those trying times I knew that I had no choice and mentally prepared for the inevitable.

I passed my physical and the group was advised that we would be called to report within two weeks and until then had the opportunity to join any other branch of service.  I, without hesitation, immediately walked across the hall and joined the Air Force.  After raising my hand and swearing to protect and defend our country I was enlisted and was given a deferred reporting date to close out my personal affairs. This was a traumatic day in my life to say the least.

What brought all this to mind was a recent article about reforming military pay and compensation. Today a new enlistee with no experience earns a base salary of about $18,000. It was recently reported that after four months in the military, a new E1 enlistee receives total pay with benefits of about $29,959.80 annually including benefits.  When I reported to training camp in April of 1969 I was paid $97 a month and when I married 6 months later my pay increased to $150 a month including separate rations before taxes!  We paid $68 a month rent and after utilities, taxes, and food had little if anything left over each month. We didn’t have a car and walked to a local laundry mat in Biloxi Mississippi with our clothes in my duffle bag.  To make ends meet I got a part time bar waiter job at the local NCO club.

In January of 1970 my squadron leader offered to sell me his 1963 Chevy Impala however the Credit Union refused my $500 loan application.  The seller agreed to cosign and we picked up our first car and when we went to do our laundry that week we ended up in Mobile Alabama!  It was exciting to just hop in our car and drive to any destination we desired.  That was not only how my military career started it was also the start of our 44 years of marriage to date with hopefully many more years to come.

The median income in 1969 was $8,632 and last year it hovered  around $52,100. As a percentage of median income my 1969 enlistee salary was about 13% of median income and today an enlistee’s starting salary is approximately 34% of median income.  If you look at salary comparisons based on the minimum wage the comparisons are dramatic. The federal minimum wage in 1969 was $1.60 an hour compared to $7.25 today. A new enlistee currently earns $8.62 an hour not counting benefits based on a 2087 hour work week which doesn’t hold true for military personnel that can work unlimited hours based on the circumstances of their service.  In 1969 I made 55 cents an hour,  about 34% of the minimum wage at the time.

All that being said, it appears to me that we as a country are finally paying military personnel fairly for their service and sacrifice. Considering  a new enlistee earns only $1.37 over minimum wage, not counting benefits, everyone benefits.  You can’t compare military service to someone working at McDonalds or any other minimum wage job.  I believe the so  called reformers have little to no military service and are simply focusing on statistics, not reality. When you join the service or prior to 1973 when you were drafted you give up your freedom of choice and to determine your own fate. You march to a different drummer and take orders, serve blindly and faithfully, for the good of our country.

What perplexes me is that administrations, politicians, and bureaucrats focus their cost cutting efforts on those who are contributing the most including the military and federal civil servants that are making a difference and performing valued services. Sure, there are ways to improve efficiencies in all areas including the military and federal civil service. However, they should be addressing the gorilla in the room;  overspending in all areas, purging outdated and duplicate programs, realistic entitlement reforms to ensure Social Security and Medicare will be there when needed, fraud, waste, and abuse.  There are so many ways to cut if they only had the courage to do so starting with a balanced budget and like the vast majority of us government too must live within its means.

Growing up, I and my family were what many would consider poor.  My father died when I was a year and a half leaving my mother at age 36 with four children to raise on her own. we moved 10 times before I entered the service, we didn’t own a car, home, or have what many take for granted today. Yet, we were raised to be proud, independent, and our mother did without encouraging her children to pursue their desires and dreams with whatever resources she could muster. Growing up in that environment was priceless and doing without teaches us much including that to get ahead you have to work hard and constantly strive to be successful in whatever you pursue.

Many federal employees and retirees served in the military and a good number of retirees didn’t have a choice, they were drafted.  President Kennedy at his inaugural  speech said “ask not what your country can do for you, ask what you can do for your country” and I think we’ve somehow lost that over the past half a century.  We need to return to that mentality.

Learn more about your benefits,  employment, and financial planning issues on our site and visit our Blog frequently at https://fedretire.net to read all forum articles.

Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Posted in LIFESTYLE / TRAVEL, RETIREMENT CONCERNS

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Qualifying Life Events, Don’t Lose Your Benefits

Posted on Thursday, 20th February 2014 by

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(Updated 12/15/2024)

What prompted this article was an email from Holly, a federal retiree, who recently moved to Arizona. She had been calling OPM, trying to change her health care plan, for almost 2 months without success because the FEHB plan she had didn’t offer services at her new location. The one time she did get through a recorded message advised her to call back when they were not as busy!

Annuitants have 60 days to change their FEHB coverage after a move and Holly was fast approaching the two month deadline and emailed me in desperation. I initially advised her to call OPM early in the day and repeatedly until she got through.  She still could not get through so I called OPM and explained the problem Holly was having and I asked the customer service representative to call her. OPM called several hours later and she was able to make the change over the phone that same day.

Unfortunately, contacting OPM by phone on most days is frustrating and when I do get through I often have extended waits of 40 to 60 minutes or more. They are apparently understaffed and I understand they aren’t able to authorize overtime.

There are many life events that can and will affect your benefits; a move, divorce, you marry, your child reaches age 26, you reach age 65, your spouse dies, and many others. OPM publishes an online Life Events Guide that you will find helpful.

There are time limits on life events and if you don’t take action within the specified time period you will not be able to do as you desire. This can be catastrophic for those who are unable to add a survivor annuity for their new spouse or add them to their health care plan. Don’t get left out just because you were unaware of these restrictions.  The following summary covers the major life events that you need to be aware of to maintain your benefits:

When you move

Notify OPM immediately so that you will continue to receive information about your benefits and 1099R statements.

You have 60 days from the date of the event to make a health benefit change. A relocation outside of your FEHB provider’s network is considered a qualifying life event.  You may call 202.606.0500 or toll free 888.767.6738, or write to OPM ROC, PO Box 45, Boyers, PA 16017. Include your retirement claim or Social Security number and the 3 letter/number health benefit code that you want to switch to. Review FEHB plan brochures online to identify a suitable replacement for your new location.

The dental and vision coverage are administered by BENEFEDS.  The number is 877.888.3337. Contact them regarding this coverage.




If You Divorce

When you divorce, your spouse is no longer a family member and cannot be covered under your family health benefits plan. However, a divorce decree (court order) may say that you must provide a survivor annuity or health benefits for your former spouse. This is a complex issue. Download the Life Events brochure listed earlier in this article. Also visit our Divorce Forum for insight into what to expect when you divorce and precautions you must take to protect your benefits.  The two article links listed below and the OPM publications provide helpful information on this subject:

Marriage

You have 31 days before your marriage to 60 days afterward to change to a family health benefits enrollment. You can add a new spouse and convert to a family or the self plus 1 plan during the next open season if you miss this deadline.

Send a copy of your marriage certificate showing the date of the marriage and the name of your spouse to the U.S Office of Personnel Management, Retirement Operations Center, P.O. Box 45, Boyers, PA 16017-0045.

You must notify OPM in writing within two years after the marriage if you want to provide a survivor annuity benefit. Discuss survivor annuity options for your new spouse with OPM. If you were unmarried at retirement and married afterward, the reduction in your annuity begins no earlier than the first of the month beginning nine months after the marriage date.

When you reach age 65

This is when you are first eligible for Medicare benefits. If you are retired and receiving Social Security you will automatically be enrolled in Part A and B and should receive your Medicare card three months before your 65th birthday. If you decide not to take Part B follow the instructions that you receive with your enrollment package.  If you aren’t receiving Social Security you have a 7 month Medicare enrollment window that stasrts 3 months before yourd 65th birthday. For more information on signing up for Medicare and its impact on your FEHB benefits read the following articles that I recently wrote on the subject:

 When a child reaches age 26

Contact OPM within 60 days after the child reaches age 26 if you want to temporary continue health care coverage for up to 36 months if needed.  Disabled children can remain on the parents plan. Review OPM pamphlet RI-79-2 for details.

The death of a spouse

Send a copy of your spouse’s death certificate to OPM. If you are providing a survivor annuity for your spouse, OPM will generally increase your annuity after receiving proof of your spouse’s death.  Other considerations:

  • You may also be able to change your FEHB health care plan to self only if you don’t have other eligible family members.  Coordinate this with OPM. They can make the change over the phone.
  • If you had FEGLI Family life insurance coverage under Option – C ask OPM for a life insurance claim form.
  • Consider changing your Federal or State income tax withholding.

If your spouse was your designated beneficiary for life insurance or for retirement submit beneficiary changes using  the SF 2808 form for CSRS or SF 3102 form for FERS retirements, and SF Form 2823 to change your beneficiary for your FEGLI life insurance policy.  You can obtain copies from OPM or visit our sit’s retirement forms page to download these forms from OPM.

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

The annuitant dies

Family members should contact OPM immediately and any funds sent to the annuitant after their death must be returned to OPM. It is illegal to cash annuity checks made out to a deceased annuitant or withdraw deposited funds that OPM automatically deposited to the deceased annuitants account. Also advise the appropriate financial institutions of the death and send OPM a copy of the death certificate.

You must complete the appropriate forms, attach a copy of the employee’s death certificate, and a copy of the certificate of the marriage to the widow or widower. OPM will send out forms upon notification or you can download them from their site and they provide instructions on how to proceed.  They also offer an informative video that will help you through the process.

Download OPM’s Life Events pamphlet for other life events not covered here such as your former spouse dies or remarries before age 55 and others.

Learn more about your benefits,  employment, and financial planning issues on our site and visit our Blog frequently at https://fedretire.net to read all forum articles.


Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Retirement Updates, Retiree Job Options and Home Remodeling Tips

Posted on Thursday, 6th February 2014 by

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The last series of articles focused on signing up for Medicare at age 65 and FEHB plan impact. Here is another update before moving on to other areas. I use Turbo Tax to complete our income taxes each year. When I was entering data from my wife’s Social Security SSA-1099 Form I discovered that Part B, C and D premiums are deductable from your Social Security earnings which can reduce your federal income taxes. This is another fact to consider down the road when you sign up, there is at least for now, a tax break for your Medicare premiums.  Also the link I included in the last article for Medicare and Blue – Medicare, Blue and You was for the 2013 brochure. They just removed that link and posted the new 2014 brochure this week. Click on the highlighted link above to download the 2014 brochure.

Investment Option (Series EE Savings Bonds)

If you go to www.treasurydirect.gov  and look up EE bonds you will find that the current fixed interest rate is a meager .1%! At first glance anyone in their right mind, from my perspective, would simply say NO to EE savings bonds. Most don’t realize that Uncle Sam guarantees that the original paper bonds or original purchase amount through the new Treasury Direct online program will double if held for 20 years and they continue to earn interest for 30 years from their issue date.  Essentially, if you cash in an EE Savings Bond after 20 years your effective yield is about 3.5%! I wish I could get that on a 1 year CD but of course I’m dreaming. The Federal Reserve continues to keep interest rates artificially low so the government can continue to borrow at discount rates.  The long and the short of it is that you must hold EE bonds for at least 20 years to earn the higher rate, if you cash out even a day earlier you are held to the much lower .1% rate.  

If you are 10 or more years from retirement, purchasing EE bonds may be worthwhile for a place to park at least some of your cash if you know you can live without it for that long. Otherwise, retirees might want to consider buying them for their children or grandchildren since they have time on their side and in most cases can wait for the cash. I liked the paper bonds that were discontinued several years ago. Today you must purchase them online through Treasury Direct. Additional Ways to Save are provided on our retirement planning site.  

Jobs update

Companies continue to submit job vacancies to our Jobs Board to attract federal retirees. You will find jobs ranging from Retirement Benefits and HR Specialists to part time job opportunities in hundreds of occupations across the country.  Many opportunities exist for those looking to supplement their retirement income or to start a second career.  We provide this free job listing service to companies that are seeking to hire experienced retired federal workers.

Home Remodeling with Retirement in Mind

Over the years I’ve remodeled many homes and only when I entered my 60s did I consider the impact of aging on my remodeling projects. I built a new home when I was 50 for what I thought retirement would be but until you get there you never know what to expect.  If you are in your 40s or older and considering staying in place, consider all of the following when you plan your next remodeling project:

  • Install bathroom vanities and kitchen cabinets at a higher height so you won’t have to bend down as far. Most bath vanities today are higher than they were 10 or 15 years ago however some contractors will use the lower profile cabinets to cut costs. Always have them specify the cabinet heights before signing on the dotted line.
  • For new homes consider a lot that will have an entrance with as few steps as possible, preferably none, including steps from the garage.
  • When remodeling your bath install bath tub grab bars and a bench in the walk in shower.  Also consider higher profile commodes located in an area where grab bars can be easily installed if and when needed.
  • Use easier to grasp handles on cabinets and doors that are made for the elderly.
  • Are your steps to the second floor and/or basement wide enough to accommodate a stair lift? Without an elevator your only option will be a stair lift and there are clearances that need to be maintained for proper and safe use.
  • If you plan to complete a major remodeling project; knocking down walls, etc., replace existing doors with 36 inch wide doors and widen hallways to accommodate a wheelchair down the road.  Also, consider finding a location to stack 5 feet square closets on each floor that can be used for an elevator installation if needed.  Check with a local elevator company for installation specifications.  For new 2 story homes have the contracor stack closets one above the other from the basement to the second floor. It’s easy to do before you build and much more difficult and costly adding an elevator shaft to an existing dwelling.
  • Larger 2 story homes often have two furnaces, one in the basement and a second one in the attic. Attic access can be a challenge for anyone with arthritis or joint problems.  If you are considering purchasing a new or used home with this configuration consider if you will be able to get to the attic to change filters, etc.
  • In northern climates, many 2 story homes have high efficiency furnaces installed in the attic that expel a considerable amount of condensate (water). This water can easily freeze during the winter months and shut your furnace down.  I don’t understand why building codes permit installation of high efficiency furnaces in unheated attics that are subjected to freezing.  Some builders are enclosing attic furnaces in heated space or installing lower efficiency furnaces that use a regular flue and that doesn’t expel condensate.  Check on this with your builder.
  • Add additional storage to reduce clutter if possible to reduce trip hazards.

Learn more about your benefits,  employment, and financial planning issues on our site and visit our Blog frequently at https://fedretire.net to read all forum articles.

Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Medicare Part B and FEHB Update (Feedback – Part 4)

Posted on Thursday, 30th January 2014 by

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The Medicare and FEHB impact series has generated a lot of interest, comments, and questions that deserve additional attention. 

One reader commented that the following quote is true for Blue Cross & Blue Shield (BCBS) Standard but not true for BCBS basic. The last article stated that “once Medicare is the primary payer, you can use any provider as long as they accept Medicare. In other words, using preferred providers of your FEHB plan will be irrelevant since plans like BCBS will waive the coinsurance regardless of whether or not the provider is in the BCBS network or not.  It is still going to provide 100% coverage if Medicare pays first.”  

The above statement is true for BCBS Standard. The Medicare and Blue – Medicare, Blue and You pamphlet states the following for the Basic option: “If Medicare Part B is primary, you don’t pay coinsurance and copayment amounts if you use Service Benefit Plan Preferred network providers. Prescription drug coinsurance and copayments are not waived.”  To further clarify this for Basic subscribers, if you do go to a doctor that accepts Medicare and who isn’t a preferred provider, Medicare will pay their customary payment and you will be responsible for any Medicare deductables, and coinsurance. In this situation you would not be responsible for Basic BCBS copayments since they will not be paying for any of the services.

This brought up another question.  What would you do if you were enrolled in Medicare Part B and a BCBS Basic preferred provider refuses to accept Medicare?  Blue Cross and Blue Shield state in their Medicare, Blue and You pamphlet that, “if you have both Medicare Part B and Blue Cross and Blue Shield Service Benefit plan coverage, always ask your physician if he or she accepts Medicare assignment. If your physician does not accept Medicare assignment, he or she may charge 15 percent more than Medicare’s allowance. This is called the limiting charge. BCBS will pay for such services up to Medicare’s limiting charge. Under the Basic Option, the physician must also be a preferred network provider.”  If a BCBS preferred provider submits a Medicare opt-out notice to them you will still be able to use that doctor with full benefits and your Part B copayments will be waived according to their customer service department.

Rosemary, who has BCBS Basic, talked with her local “SHINE” specialist concerning whether or not they should enroll in Medicare Part B. The SHINE Program (Serving Health Information Needs of Elders) is a state health insurance assistance program that provides free health insurance information, counseling and assistance to Massachusetts residents with Medicare and their caregivers.  Rosemary decided not to enroll in Part B and to stay with their BCBS Basic plan after discussions with her SHINE specialist. Their Medicare Part B premiums would generally cost them more than any copayments and coinsurance they would have to pay each year. Rosemary and her husband didn’t sign up for part B when they were 65 and after adding the delayed sign-up penalty their health insurance premiums would more than double.  




There are several organizations that provide assistance with Medicare and health insurance issues in your State including SHINE and State Health Insurance Assistance (SHIP) programs.  In general, if you have a good employer based health care program it is best to stay with that plan and before signing up for Part B you need to consider whether it is worth the cost.  

If you decide not to enroll in Medicare Part B, Part A covers hospital care only, not physician care, and if you are hospitalized and don’t have Part B you would have to pay any coinsurance, copayments, and deductable for any medical physician services that you receive during your hospital stay.  Your hospital coinsurance and copayments would be waived under Medicare Part A, not so for medical services without enrolling in Part B. 

Finally, a reader wanted to know if a Medicare Part B enrollee can drop their coverage if they decide it is too expensive or not appropriate for their circumstances.  You can withdraw from Medicare Part B at any time if desired. Once you withdraw from Medicare B you would have to notify your FEHB provider immediately because they would revert back to primary provider for medical services. To cancel Medicare Part B coverage use form CMS-1763. This form isn’t available online and you must contact your Social Security Administration office to complete the form. They will discuss the consequences of canceling your coverage, including how penalties are accessed, and process the form for you over the phone. The Social Security FAQ titled How do I terminate my enrollment with Medicare Part B when I have other health insurance explains the process in more detail.  

Final Thoughts on Part B or Not!

This decision depends on your personal circumstances.  Following is a list of issues that can help you make this decision:

  • When you enroll in Part A & B, while still maintaining your FEHB enrollment, your hospital and medical deductable, coinsurance and copayments are waived by most plans and your FEHB plan acts much like a Medicare Supplemental plan. Medicare will be your primary care provider.
  • Compare potential future deductable, coinsurance and copayments to the additional cost of Part B. If Part B premiums are less, Part B enrollment makes sense.  The Medicare and Blue – Medicare, Blue and You pamphlet can help you with the comparisons although they only provide them for the Standard plan. Use your BCBS benefits booklet to determine your Basic copayments and coinsurance amounts for the comparison.
  • You can always withdraw from Medicare Part B if the costs get prohibitive and before you complete the CMS-1763 withdrawal from the Social Security counselor will discuss the consequences.
  • Whether or not you enroll in Part B, medical providers are required by law to only charge the Medicare rate for anyone 65 or older, a benefit and savings for FEHB plan insurers.  If the provider doesn’t accept Medicare assignments they can charge 15% more, the Medicare limiting charge, for their services.  BCBS will cover up to the limiting charge and it’s important to note that Basic plan subscribers must use preferred providers.
  • Part B premiums could cost you much more than you planned if you convert an IRA or the TSP to a ROTH, take TSP or IRA withdrawals, have capital gains from the sale of stocks or assets, work in retirement,  and you have to consider your spouse’s income and IRA withdrawals as well.  Your Modified Adjusted Gross Income (MAGI) determines your Part B premiums each year.  They range from $104.90 to as high as 335.70 per month per person. A couple, both over 65, would pay from $209.80 to $671.40 depending on your (MAGI).
  • Are you concerned about the penalty for not enrolling in Part B at age 65? I talked with a Medicare counselor that related the following story to me.  One of her clients worked for a local municipality that recently required all retirees to enroll in Part B to retain their health care coverage. This person was over 65 and subject to the penalty however the municipality made up the difference for this individual after announcing the benefit change.  One of my reasons for considering Part B is due to the uncertainty around our FEHB plan and future Affordable Care Act impact. What if we were required in the future to either enter an exchange or have to purchase Part B to retain our FEHB plan? Hopefully, we would be treated in a similar fashion or possibly grandfathered in like they have done in the past with other retirement changes.
  • Finally, if you are still uncertain contract your local SHIP representative to discuss your options and concerns.

I have my decision to make this year and am evaluating all options and doing cost comparisons to see how things shake out. I have until August to enroll in Part B without a penalty so I still have time to make an informed decision.  

Use the following links to learn more about your options and to review Parts 1 and 2 of this series:

Learn more about your benefits,  employment, and financial planning issues on our site and visit our Blog frequently at https://fedretire.net to read all forum articles.

Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Change to a Lower Cost FEHB Plan When Signing Up For Medicare

Posted on Thursday, 16th January 2014 by

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My last article titled What to Consider Before Enrolling in Medicare B, part 2 of this 3 part series, helped you understand Part B and how it impacts your FEHB benefits and costs. This final article of the series discusses whether a lower cost plan would provide you acceptable coverage at a lower overall cost.

Because most of your deductables, copayments, and coinsurance are waived when you sign up for Medicare under many health plans, it makes sense to look for a lower cost FEHB plan if you will be paying Part B premiums.  A married couple over 65 would pay $209.80 minimum monthly, $104.90 per person in 2013 for one national plan. If you can find a suitable plan that includes your health care providers at a lower cost it makes sense to switch however you have to evaluate plans carefully to ensure you will be receiving the services you need.




Many if not most retirees subscribe to Blue Cross and Blue Shield (BC/BS) because they are international and you can find preferred providers in most locations. They offer a Standard and Basic Plan. The lower cost Basic Plan acts more like an HMO without an annual deductable and your out-of-pocket expenses are minimal. The downside is that prior to enrolling in Medicare you must use their Preferred Providers, except for emergency care, and they don’t have a mail service pharmacy option. You can obtain a 90 day supply of prescription drugs if you pay additional copayments.

Tammy Flanagan, Senior Benefits Director for the National Institute of Transition Planning, Inc stated that “once Medicare is the primary payer, you can use any provider as long as they accept Medicare.  In other words, using preferred providers of your FEHBP plan will be irrelevant since plans like BC/BS will waive the coinsurance regardless of whether or not the provider is in the BC/BS network or not.  It is still going to provide 100% coverage if Medicare pays first.”

My wife and I had the Basic Blue Cross and Shield Plan for about 10 years until 2011 when we switched to the GEHA Standard Plan. My wife’s Doctors are employed by UPMC and they were threatening to discontinue participating as preferred providers for Blue Cross and Blue Shield. The advantage of the GEHA plan is their low cost, $236.91 monthly for the Standard Family Plan, and it covers out-of-network providers similar to the higher cost Standard Blue Cross and Blue Shield coverage. There are benefit differences and you have to read each plan’s brochure carefully to determine what plan is right for you.

When we were with Blue Cross and Blue Shield we didn’t have a problem finding preferred providers since so many doctors accept Blue Cross and Blue Shield nationally and the Basic Plan covers medical emergencies through any provider.

This Open Season we changed back to Blue Cross and Blue Shield’s Basic Family Plan for $309.30 monthly.  After two years with GEHA we found that our out-of-pocket expenses were higher than we anticipated. GEHA charges an annual per person $350 deductable and other coinsurance and copayments that we didn’t have under Blue Cross and Blue Shield Basic.  After enrolling in Medicare Part A and B most  FEHB plans waive these costs. One of the primary considerations for changing back to BC/BS was that the GEHA Plan only pays $250 for hearing aids where Blue Cross and Blue Shield covers up to $2,500 for hearing aids every three years.

The issue we had about UPMC doctors still isn’t resolved however they will remain preferred providers through 2014. If they do decide to leave the network in 2015 we won’t have a problem because Medicare will be our primary health care provider. If one of us wasn’t enrolled in Medicare we could either change doctors, transfer back to GEHA or consider the Standard Blue Cross and Blue Shield option next Open Season.

I probably would have stayed with GEHA because they would have waived all of the deductable, coinsurance, and copayments under Medicare when I turn 65 next year. The hearing aid issue was a major factor for me and the fact that we use very few prescription drugs and the ones we do use are inexpensive so either plan’s prescription coverage was adequate for us.

It does makes sense to look for lower costs since Medicare will be your primary health care provider and FEHB plans in most cases waive the deductable, coinsurance, and copayments.  With the cost of everything these days going through the roof why pay more than necessary.  Before changing evaluate your current costs, call other FEHB providers for clarifications after reviewing their brochures, and make the decision based on the facts and your family’s needs.

All of the plan brochures cover Medicare and the effect it has on subscribers in Section 9.  Read that section carefully for all plans of interest and then look at the benefits they provide to determine what plan is best for you and your family regardless of cost.

Use the following links to learn more about your options and to review Parts 1 and 2 of this series:

Learn more about your benefits,  employment, and financial planning issues on our site and visit our Blog frequently at https://fedretire.net to read all forum articles.

Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE

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