Married feds: What happens after you’ve gone?

“A woman needs a man like a fish needs a bicycle.” — Gloria Steinem

“Take my wife, please!” — Henny Youngman

Now that we’ve offended just about everybody, here’s an old joke to illustrate a serious situation facing married feds.

Husband and wife are having a serious talk. She asks if she dies, would he remarry. He quickly says yes. He likes having a partner, so yes.


Then she asks, “Would you two live in this house, our house, the one that we built and paid for?” Mr. Smooth says yes, he likes the den, the yard and the neighbors.

Next she says, “You two wouldn’t sleep in our bed, would you?” Without missing a beat he says yes, “because the mattress is only a year old and its paid for.”

Now near tears, she says, “You wouldn’t give her my golf clubs, would you?” Finally catching on, Mr. Sensitive says, “Certainly not. No dear, no. Besides she’s left-handed.”

Which begs the serious question facing many married feds. When they retire, each will get a federal annuity (pension) for life. They can also provide a survivor benefit for their spouse by taking a 10 percent reduction in their pension. That was one of the questions we (benefits expert Tammy Flanagan and I) got in last week’s online Q&A chat. One of them was from Jonathan who said he and his wife are about the same age, both GS-14s. He’s CSRS; she’s FERS. He said they were each thinking about providing a survivor benefit for the other. He asked Tammy if he was missing anything. Her reply:

The biggest question you have to ask each other is this:

How dependent are you on your spouse’s CSRS (or FERS) retirement benefit? If the answer is: “If my spouse’s retirement stopped, I would have to sell the house and move in with the kids (or a one-bedroom apartment, or sell the second home we enjoy in Florida, etc.).” Then, it seems that you should provide a survivor annuity for your spouse. Since you both have retirement benefits of your own, would you be able to live on just your own retirement (and inherited TSP) if your spouse were to predecease you? Maybe you could if the house were paid off? You have the larger annuity (CSRS) so it might hurt even more if your benefit stopped and your spouse had to live on just her FERS benefit and Social Security … that depends on how much service she had and how much you both have been able to save in your TSP and other retirement accounts. If that’s the case, then carry enough life insurance to pay off the mortgage (or other debt) so that would make it easier for the surviving spouse to pay their monthly expenses without the other retirement. If you are living off both retirement incomes in your retirement, then it might make sense to consider leaving a survivor annuity for each other. The age difference and health differences isn’t a big factor since this does not determine who will die first… you might not see that bus coming down the street when you are crossing!

I recommend that you both get retirement estimates run with and without the survivor benefit and consider all of the what-if scenarios. Another option is a partial survivor annuity and add some additional life insurance, if you are insurable. Keep in mind that within the first 18 months of retirement you can go back to the full survivor annuity if you waived it or elected a partial (there is a stiff penalty to do this, so only if there was an extreme life event that occurred that would make you rethink your election).


Compiled by Jack Moore

The human nose can distinguish between 1 trillion different scents, according to a team of researchers at Rockefeller University.

(Source: Salon)


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