When applying for your FERS retirement, one of the key decisions you’ll need to make is whether to select a survivor benefit for your spouse. Options include a full survivor benefit, a partial benefit, or no survivor benefit at all. It’s important to understand how your choice will affect your annuity payments and what happens if your spouse passes away before you. Here’s a guide to help you navigate these options.
Impact of Survivor Benefits on Your Base Annuity
Under FERS, you can choose for your spouse to receive 50% of your base annuity (full annuity) or 25% (partial annuity) after your death. Opting for the 50% survivor benefit reduces your base annuity by 10%, while the 25% option reduces it by 5%. If you choose a partial or no survivor annuity, your spouse must provide written consent. Remember, for your spouse to continue their FEHB coverage after your death, you must elect either a full or partial survivor benefit.
What If You Choose No Survivor Annuity?
Choosing no survivor annuity means your spouse’s FEHB coverage will end upon your death. Therefore, you’ll need to plan for your spouse’s healthcare costs and other financial needs after you’re gone. This could involve purchasing additional life insurance or a private-sector lifetime annuity.
What Happens If Your Spouse Passes Away First?
When deciding on a survivor annuity, consider both your and your spouse’s health and longevity. If your spouse predeceases you, the funds withheld for the survivor benefit from your FERS annuity are not recoverable. To stop the deductions from your annuity, you will need to submit your spouse’s death certificate to the OPM along with the necessary form.
Can You Modify Your Survivor Annuity After Retirement?
You have 30 days from the date of your first regular annuity payment to cancel or reduce your survivor benefit election. If more than 30 days have passed, but you are still within 18 months of your retirement date, you can only elect a survivor annuity or increase the amount previously chosen.
Before finalizing your decision, consider how much your spouse will receive from Social Security, your TSP, and other sources of retirement income after your passing. For further guidance, consult with an FRC® trained advisor.
