Posted on Friday, 5th September 2014 by

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How are you preparing for retirement? Are you the Ant or the grasshopper? My first article about a month ago provided 5 essential tips to be prepared like the ant. Based on feedback from a few friends that I shared the article with, all consider themselves ants. No one is a grasshopper or at least admits to it. Here are 5 additional tips as you prepare for your federal retirement.

1. Remember to get credit for all creditable service.

Creditable service is time that can be counted toward service required to qualify you for entitlement to retirement benefits. Your Official Personnel Folder must contain all creditable service (civilian and military). The most common is credit for military service. If you served in the military and now hold a civilian position, your military service time may apply toward your civil service retirement. You must pay any military service credit before you retire. Payment generally affects retirement eligibility and the amount of your retirement. You will be required to obtain your estimated earnings from the appropriate military finance center prior to starting the process.

Also, there are other types of creditable service. If you were a federal civilian who paid into the retirement fund, separated and withdrew your contributions that’s considered creditable service. Creditable service also includes service for which a specific statue allows credit for service, such as the Peace Corps, employees of Gallaudet University or the District of Columbia Government. To obtain the amount owed for deposit or redeposit service, complete the form SF-2803 (CSRS) or SF-3108 (FERS), Application to Make Deposit Redeposit and submit it to your HR office. There are specific regulations in regards to these requests that your HR office should be able to provide guidance. For additional information click on the following link:

(In addition, refer to 5 USC 8332 and Chapters 10, 12 and 20 of the CSRS/FERS Handbook for a list of all service that is creditable.)

2. Understand Social Security

If you are covered under the Civil Service Retirement System (CSRS) you are not covered by Social Security. If you are in the Federal Employees Retirement System (FERS), you are covered by Social Security.

If you have worked in jobs where you paid Social Security, you should ask for a form SSA-7004-PC, Request for Earnings and Benefit Estimate Statement, from your local Social Security Office or contact their site to get your social security statement online. The Social Security Statement provides information on your future eligibility for Social Security benefits and estimates of these benefits at specified dates. These estimates do not reflect reductions for the Government Pension Offset (GPO) or the Windfall Elimination Provision (WEP).

The WEP primarily affects you if you earned a pension in any job where you did not pay Social Security taxes and you also worked in other jobs long enough to qualify for a Social Security retirement or disability benefit. The WEP can reduce, by up to 60 percent, the earned Social Security benefits of a CSRS federal worker (not a FERS-only employee).

The Government Pension Offset (GPO) reduces your Social Security spousal or survivor benefits by an amount equal to two-thirds of your CSRS pension. For more information on Social Security refer to:

3. Know your Medicare benefits

Medicare is a Health Insurance Program for persons 65 years of age and older and some people with disabilities under 65 years of age. The decision to enroll in Medicare is yours. You can apply for Medicare benefits 3 months before you turn age 65. If you do not apply for one or more Parts of Medicare, you can still be covered under the FEHB Program.
Medicare has four parts:

  • Part A (Hospital Insurance). In general, Part A covers hospital, skilled nursing facility and nursing home care. It also can cover hospice and home health service care. Most people do not have to pay for Part A. If you or your spouse worked for at least 10 years in Medicare-covered employment, you should be able to qualify for premium-free Part A insurance.
  • Part B (Medical Insurance). Medicare B covers services or supplies that are needed to diagnose or treat your medical condition. It also covers health care to prevent illness (like the flu) or detect illnesses at an early stage, when treatment is most likely to work best. Most people pay monthly for Part B. Generally, Part B premiums are withheld from your monthly Social Security check or your retirement check.
  • Part C (Medicare Advantage). If you are eligible for Medicare, you may have choices in how you get your health care. Medicare Advantage is the term used to describe the various health plan choices available to Medicare beneficiaries. These are health care choices like Health Maintenance Organizations (HMOs) and Preferred Provider Organization (PPOs). The monthly premium varies widely depending on your state and the private insurer you choose, as well as whether you choose an HMO or PPO for your Medicare Advantage coverage.
  • Part D (Medicare prescription drug coverage). Medicare D is optional. It provides insurance to help you pay for prescription drugs. There is a monthly premium for Part D coverage. Most Federal employees do not need to enroll in the Medicare drug program, since all Federal Employees Health Benefits Program plans have prescription drug benefits that are at least equal to the standard Medicare prescription drug coverage.

For additional information on Medicare refer to:

4. Understand your Federal Employees Group Life Insurance (FEGLI) options:

One of the key decisions you must make when you retire is what to do about your FEGLI coverage. Here are some things to remember.

You can keep your basic life insurance in retirement if all of the following conditions are met:

  • You have coverage when you retire;
  • You have not converted coverage to an individual policy;
  • Your annuity begins within 30 days, (However if you are retiring under the Minimum Retirement Age (MRA) plus 10 provision of the Federal Employees Retirement System (FERS) and you have postponed the commencing date of your annuity, health and life insurance coverage is suspended until your annuity begins), and,
  • You were insured for life insurance for the five years immediately preceding retirement or the full periods of service when coverage was available.

You can keep your optional life insurance in retirement if all of the following conditions are met:

  • You are eligible to continue your basic coverage and you were covered by the optional life insurance for the five years immediately preceding retirement or the full periods of service when coverage was available, if less than five years.

At the time you retire, you’ll have the choice of no reduction in coverage, a 50 percent reduction, or a 75 percent reduction. Until you are retired and 65, you’ll get basic FEGLI at the same cost. The coverage doesn’t begin to reduce until you are over 65 and retired. For additional information please see:

5. Assess your need for Long-Term Care

Long term care is care that you need if you can no longer can perform everyday tasks by yourself due to a chronic illness, injury, disability or the aging process. According to the U.S. Department of Health and Human Services (HHS), about 70% of people turning age 65 will need long term care services at some point in their lives. Federal and Postal employees and annuitants, active and retired members of the uniformed services, and qualified relatives can apply for this insurance. Certain medical conditions, or combinations of conditions, will prevent some people from being approved for coverage. Long-term care insurance rates are based on a person’s age when he or she applies. For more details, see

How well are you preparing for your retirement? Even if you aren’t the ant in all aspects, find ways to prepare now.

During the next few months, I will discuss a few of these retirement preparation tips in detail. If there are topics that you would like to see discussed, please let me know.

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties 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, medical 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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