Survivor Benefits Program (SBP)

How does the Survivor Benefits Program (SBP) work for federal employees?

19

#19 – Death, 21, Annuities

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Death 21 and annuities, all on today’s Fednobabble.com.


Welcome to today’s Fenobabble, where we make retirement benefits understandable for humans in under 20 minutes. I’m Cassie Knight and I am Kevin Jones.


And we take your questions from Fednobabble.com where you can submit them or from my Fed Pilot workshops.


And we dive in a little bit deeper and try to explain these things a little bit more than we might have time to in a workshop. So let’s jump in and talk about the first one. What happens if my spouse dies first? Well, that’s a good question.


Where is our favorite remark Kevin?


It depends. Yes, it does. It does depend, doesn’t it? I mean, what benefit are we talking about here? Right.


Defensive stance is first for survivor benefit or for your for your pension or your family or for your health benefits or for it.


I got one more. Are we talking about inservice or retirement here? Yeah.


So it does not change. Yeah.


So, OK, so there Cassie is such a great example of a nice, easy, simple question or what should be a nice, easy, simple question. And then you put it into each of the benefits before you retire, after you retire. And let’s say there are five different benefits that we could look at, just throwing that out and then there’s before and then after. That’s 10 different scenarios that someone should go through to say, OK, what happens if I die first with my pension before I retire?


What happens if I die first with my pension after I retire and know that they are different? Or what happens if my spouse dies first? So really, there are 40 different different scenarios that everyone should kind of go through. I mean, that seems overwhelming, but and some of them are really easy to figure out, but they all have to be gone through. And it also depends, is your spouse a federal employee or not?


Can’t you just say, do they have military service?


Oh, yeah. Yeah. Yeah, this is a very, very good question that really needs to get unique nor case, and I’m going to say that it depends on your so many different factors.


That you really need to talk with somebody about this? Yeah, this is definitely one where you need to look at all those different factors that we just listed out, those different scenarios. And obviously, our advisers in our trusted network help you figure those out. If you guys don’t have somebody where you can ask that question to, that’s knowledgeable in the benefits because the super important that they are, so they can run over all of those different scenarios with you and OK, what if my spouse dies first for my attention, or what if my spouse dies first for the family benefit or TSP?


Right.


Yeah, you know how and I was just thinking of is that so the answer to this often is and I hate to say it, but it depends again. So you take one of these situations. What happens to my pension if my spouse dies first or I do any of these right then? So you said, you know, you need to have someone help you. Well, my first thought was, OK, can you go to H.R.? Well, yes, someone can go to H.R., but really all the all the H.R. can say is, well, in this scenario, here are your options.


They can’t say what options are best, you know, and that’s what, again, someone, an adviser or someone that that knows this and can give advice, but I can’t give advice. They can only give here the options here, the laws, rules, you choose what is best for you. So even even when you get the answer, you have to choose maybe one of the options that are out there and then which one is so really there’s a follow up question to this.


40 questions here. I mean, yeah, it depends. It’s like, yeah, OK, well, I think we’re good with that as well.


Are you married? Yes. OK, well you’re going to 50 percent survivor benefit. That may or may not be what you actually choose in retirement, so just because they give you an answer doesn’t mean it’s the right answer or what is actually pertaining to your situation, because what if your spouse is a federal employee and you don’t need to take that 50 percent option? To protect that pension and your your financially and you choose the twenty five percent option, what is that going to do if your spouse dies first?


You know, there’s so many different factors here. So, yeah, if you you can go to H.R., they will give you a snapshot of what happens to your benefits for you. And and that’s really all they’re going to give you, though. They’re going to tell you what your benefits are. They’re not even going to tell you what happens to those benefits when your spouse passes or when you pass. Right. If you get in touch with a financial adviser who is versed in the federal benefits or let us know if you need an adviser who is versed in the federal benefits, we can help you get in touch with somebody who’s really going to dive deep into all of these different scenarios.


We’re going to provide that benefits report that not only gives you that snapshot, but also explains in the future what those benefits are going to do for you. And we can run different scenarios, too, if you’re looking at maybe a decrease in your family or or what have you and those guys can really dial in your best case scenario, those kind of contagious.


Yep. Good, good, good. OK, question number two, would you recommend changing it after the last turns, 21 or now.


OK. It. So here’s another one that we can say, what is it, is it and I’m assuming it is either. Health care or FEGLI, because those are the only. Well, I guess not even health care, because health care goes to twenty eight kids. Twenty six, right. And FEGLI goes until twenty two, OK? So, OK. Let’s take FEGLI, let’s take this from a family point of view, would you recommend Changing FEGLI after the last turns, 21 or now.


So it depends. Do they need life insurance coverage? And do you already have so what is the benefit of keeping what you have? Are you looking at retiring and you think the premium is going to change? Well, I guess I need to know more in depth of what this what this person is thinking. As far as why they’re considering changing that FEGLI benefit, if it’s FEHB, you know, obviously that’s going to play a different part in it.


You know, if it and really it boils down to if the person is a dependent or not and if that child is is still a dependent, because if they’re if they leave the house and they’re not financially dependent on you, then technically they’re not covered anyways. So it depends on what that scenario looks like for you. Yep.


It’s totally, totally dependent. And again, there are so many things. And which benefit are you talking about? We’d have to dive into that and really say, OK, good, the next one I got to make sure I’m pushing the right buttons here because I think I’m accidentally pushing the wrong buttons and that happens. OK, the next one is if I am in the annuity, does it affect RMD? So what they’re talking about here is on the TSP annual statement.


There is an annuity and it takes your money and annuities. Is it? Which means it will give you that amount of money. It’s it’s a big blue fort on the front of your TSP and you’ll see them in there. It’ll give you that much money for the rest of your life. Even if you live to two hundred every month, you will get that amount of money.


Well, so I guess the question is, OK, so actually use that option. What was that if. Yeah, if you select that out and if you say that only twenty one. Yeah.


Which very very few people do, which is a good thing. I’m glad very few people do. But then there’s R&D, which the IRS comes by at about sixty two, it’s changed. So let’s say sixty two right now and they say you have to take out seventy two. Sorry. Yes. Seventy two. I don’t know what to look at. Seventy two.


And they say you have to take out so much money from your TSP. Well what if your this annuity doesn’t equal the amount of your armed. So can you answer that one? OK. So I’m going to say it depends. On I mean, it the. There are so many different factors. No, it is because, listen, it’s not just the annuity with MetLife either. If you are in an annuity and you are not taking enough of a of a distribution from your account, then the IRS is going to require an armed how much of an armed that is all dependent on how much you have in the account, what what that table looks like for you?


Well, this is really where you’ve got to talk to a financial adviser or a financial professional to be able to dial in those numbers for you. And I think that’s a huge thing. Is this person still working after seventy two? Because if you’re still working and under 70 or over 70 to the requirements are different than if you’re not working. And so all of those different factors really need to be looked at before we can answer this question. But actually talk to a financial professional and find out how much do I need to take and what does that look like moving forward at all if I’m at this age?


Because if somebody is 70, maybe they want to start taking some some of that some of that TSP money or more. If they can maneuver that annuity a little bit to offset the R&D later, I don’t know. But that’s definitely something where you’ve got to you’ve got to talk to a financial adviser professional about that situation. Yeah.


You said, you know, if you’re start if you’re still working past seventy two and I think most people would be like, are you kidding me.


Work past 62. But I remember in one of our workshops the sweet lady came in and I said, OK, you are a Sirrs employee, correct. Yes. Said How many years do you have. She told me Sixty two years. Of federal service, that’s crazy, and she was still working at what? Oh my gosh, 80 something. Yeah, yeah. Seventy eight. Yeah, yeah. At least at least I would say at least 80 if she started work when she was 18.


And I said, OK, what do you going to retire. And she said, I don’t know, I like what I do so I’m just going to keep going. Good for her.


Amazing. Yeah.


And I you know, I run across scenarios often where people don’t think that they can financially succeed in retirement and so they just keep working. Yep, because why not. And so, you know, it’s not as uncommon as people would think to be working past 60 or 70 to and and have those rules be different for somebody who is retired and depends on how a money you have as well. It’s not just your age factor and you’re in your TSP with your annuity.


They’re right. There are other buckets that you have to think about and if they’re taxable, non-taxable and how to coordinate those, because that’s all going to play into that auntie factor. Yep. So it’s not just your TSP. This isn’t something that is a I should say RMDs are not specific to federal employees. This is something that is for anybody who is in, you know, some sort of individual retirement account or something like that where they’re going to force out.


The IRS is going to force you to take a certain amount of money because they don’t want you to outlive it. Yep. Now, that’s essentially what it is. They want you to pay taxes on your money prior to you dying.


Right now. I will say also that there’s there are other scenarios. You know, a lot of people will think, OK, I’m not going to work past 62. And you say, well, there there are people who do work past 60 if they can’t financially make it. And then other people will say, well, I can financially made it. Well, I know plenty of people who still work past 70 to. Can financially make it, but what happened is and I’ve heard this happened a few times, where right before they retire, their spouse passes away.


And what are they going to do so they just decided to keep working because they like what they do and why not? My spouse is gone, so I’m not going to be taking the vacations that I thought I was going to with them. So they just continue on. I mean, there are a lot of scenarios out there that we don’t we don’t even consider that may make that happen. That’s right. So, yeah, man, all of these questions today could be just one more time.


A big it depends upon.


Absolutely. Every time.


Every time. And all I’m going to say is if you’ve got any questions or you need to get in touch with one of our advisors and our trusted network, go to Fednobabble.com. Submit that the information submitted and on page scroll down. And find what but like us to have, whether it’s the report or to ask a question and submit that to us, I prepare those reports at no cost. No obligation to you in one of our advisers will be reaching out to gather the information needed and then they can provide you with those reports that really lay out what that what those scenarios look like for right now in and beyond your years.


And so, again, Fednobabble.com, no Cassie no obligation, no sales pitch at the end either. They simply just want to provide that information for you and how you have that knowledge. So that way you feel confident in whatever decision you choose to do, whether you don’t do anything or you choose to continue working with them or continue to work with somebody else. You know, our whole goal is to give you that encouragement, to be able to take hold of your benefits and make them more advantageous for yourself.


Yep.


So please, like subscribe hit the bell. If you’re on YouTube or wherever that is, go to the podcast so you can listen to this on your way to work. If you go to work, if you’re not already quarantined at home like many, many people are, whatever it takes, just go learn about it. And thanks for joining me. And until next time, take care.

 

10

#10 – Double Payments, Rebates, Timeframes

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Double payments, rebates and time frames on today’s Fednobabble.

Welcome to Fenobabble, where we make federal retirement benefits understandable for humans and under 20 minutes, I’m Cassie Knight and I am Kevin Jones.

And we take your questions submitted at Fenobabble or at asked at one of our workshops. And we take those and we answer them here so that you can actually understand what’s going on rather than the water cooler.

And getting confused at what how how does this really work?

Well, let’s figure out question number one, do I get retirement payment and the supplemental payment at the same time? What do you think? Cassie. Well, it depends on if you’re still receiving your interim payments or your full pension amount, right? Yeah, well, you retire then OPM is only giving you 40 to 60 percent of your pension amount for a little bit of time until they finalized your pension check. OK, so during that time when you’re getting your interim payments, you are not going to receive your special retirement supplement.

Right.

However, once OPM finalizes that paperwork and they’re giving you your full pension amount, then they will also give you your special retirement supplement and any retroactive pay.

Right. Assuming you’re eligible for it, which most federal employees will also most Fer’s employees are if they’re under 62. And if they’re not working, just go back to what?

To, I don’t know, a few episodes before about the earnings test. And you can learn more about that piece. But yeah, pretty much if if all is well, then you’ll be getting it at the same time once your pension is finalized. Yeah.

And I want to make sure that this is very clear. It’s included with your pension payment. Right. Right. Because this is a federal benefit. This is not something that’s administered by Social Security.

Although they do base it on your estimated benefit at age 62, it is not coming from Social Security, it is strictly a federal benefit. Yeah, good. And it’s not a free which they don’t get out of those all very often. I know.

How great is that? Free and automatic. I mean, they don’t have to say, yes, I want to. They just get it. Not too bad. Not too bad. OK, that’s question number one. Question number two, I understand BCBS Blue Cross Blue Shield gives you a rebate for signing up for Part B as long as you have BCBS as a secondary insurance.

Do you think this is a good idea or a good deal, so basically this is a little this is a little known thing that very, very few federal employees understand. So they so when when federal employees retire, a lot of the question comes around, should I keep FEHB or should I do Medicare or should I do both? There’s a lot of question around that.

In this instance.

What they’re saying is that there is they know about that. If you do Part B and also we’ll have to throw on their part A if you do part and B and you do FEHB, there are certain plans that can give you a rebate, which means basically you’re paying premiums for Part B, you’re paying premiums for FEHB and because you’re doing all that together.

Some some carriers in some plans will give you a rebate back, so it’s not as expensive because they are a secondary insurance, right.

And this doesn’t only apply to the employee either. This is also for the eligible spouses that are in the FEHB plan as well. And so if they are enrolled in part A and Part B, then they’re automatically well, I wouldn’t say automatically they might have to talk to the plan. In fact, I think there is a form they have to fill out to submit to the carrier if they’re enrolled in the correct plan. OK. And it has to be a carrier who does this, only a few of them do, not all of them, OK, then they can fill out that information and send it in every calendar year for them and their spouse to get this rebate.

And I’m not going to say the rebate amount because I’m not sure if that changes. I mean, it probably changes every year, just like the premiums. Right.

So that’s going to be a guaranteed amount either. I don’t suspect it will be, because this is actually a new thing that carriers are doing. But I do think that they’re trying to get people to realize that, you know, signing up for Part B probably is the right thing to do. And they don’t want to handle the penalties and everything else, because I know a lot of federal employees have this misconception that, oh, I have FEHB and I don’t need Medicare.

Right. Well, that’s not always the case.

And they really need to take a look at their health, what their plan coverage is and all of those different things. And, you know, sometimes these rebates can only be used for certain things like medical payments, but not always. And so it really depends on the plan and the carrier. But reach out to your FEHB, your provider and whoever that carrier is and see if they offer this rebate.

And you can also do research on this at FEHB.com or OPM.gov and get into the FEHB website there and figure out what what plans are going to be good for you or let us know.

Yeah, that’s right, because our advisors will also be able to help you answer that question and really dig down to find out what the other financial aspects are as well. Consequences, good or bad, on what those decisions are and if this is worth it for you.

Yeah, it’s amazing how many people come into the Fed Pilot workshops and say, I already know what I’m going to do with with this or other situations as well, with other benefits. I already know what I’m going to do. And then they learn about really what’s going on and their whole plan is blown. And so my job in the workshops is to blow people’s plans out of the water.

Not really. Not for my husband. What was that? I said, I know you do that for my husband, right? That’s right.

Because he came into one of the workshops as well, and he knew that he was pretty good about it. Right. And yeah, it didn’t matter how many times I had talked to him Kevin. I told him, no, that’s really not what we should be doing. And every time I would mention something, his eyes were just kind of glossed over, though, sir.

Right. And he would just be like, oh, yeah, you’re talking shop. And just kind of, you know, how you did with your. Oh, they’re talking shop and, you know, in one ear, right out the other. And then he came to your workshop and he we were making little notes back and forth to each other. And he was like, OMG, we need to do this.

And I was like, thank you, Joe, because he gets it. Yeah. You know, but to give you some credit here, Cassie, I know your husband loves you. He’s a good guy and he loves you. But to put to put those things in context right now, we’re we’re answering questions.

Right. And it’s not in the full context. But to be able to hear those things in the full context can make all the difference in the world. Right. And that whether they will go ahead, you break it down.

So you break it down so nicely to where people can really understand. Oh, maybe I should look into that. Right. Right. And just demystify all of that water cooler talk where they’re like, oh, well, if I’m getting advice from a CSRS employee, then I’m a first employee. Maybe that doesn’t work. Does that for me? I mean, crazy, because you guys are two separate retirement systems. But, you know, it really that’s how it works.

People are like, oh, this is what you should do because this is what was good for my situation. Well, just what’s good for the goose isn’t always good for the gander.

Yeah, right. Yep, absolutely. And so coming to this and find out if this is something that’s worth it for you or not, I don’t know. Yeah.

So coming to a workshop or getting the report, just a Fednobabble.com. You got to do one of them. You got it. You got to go learn. You’ve got to go learn the information in context of the bigger picture. These questions here as we do the show, this is great. This gets people started. But it should not be the end. It should not be. Oh, I got my answer. No, it’s just I just started.

Exactly. This is just one simple piece. Yes. Oh, the the bigger picture of the bigger puzzle that you’re trying to put together, you know, to make your financial path in retirement and really make sure that you’re meeting those. And guaranteeing financial success for yourself, do your due diligence in all of your benefits and really find out how they can benefit or or not benefit you depending on your situation.

And we’ve seen that do not benefit happens a lot hurt sometimes. Yeah.

OK, so what’s the next question? Kevin next.

How much time do I have to sign up for Medicare Part B once I retire since I did not sign up for it originally.

So this one sounds like Cassie which happens. I mean, this happens. This person came to our workshop and had already retired. And and that scares me over sixty five to right.

If they are saying that they didn’t sign up when it originally was available to them, that tells me in general at age 65. So, you know, and I see this all the time where people just keep working because you don’t know if they can financially make it or not. Right. Right. It’s sad. But to get back to this question. I want to say 60 days, but I think it might be 90 days. Either way, you definitely have a little bit of time after retirement to get enrolled in Part B, and if you’ve had employer sponsored coverage.

So even if you retired and you waited six months.

Right now or a year, and you’re past that original timeframe where you could have enrolled in Part B and then you decide to enroll in Part B because you have an employer sponsored program like FEHB. If you’re in FEHB, you have that employer sponsored program. OK, then you can still have all those Part B premium or Part B penalties excuse me when you enroll. OK. And that’s a form that you fill out through a CMS. I really suggest getting in touch with a Medicare advisor in the area or a financial planner who can maybe help you out with that, because that’s really something where it depends on the situation.

It might not always make sense to enroll right away. Maybe you maybe you decide to wait, but there can be some consequences if you’re not taking the proper action to make sure that those are avoided. Yeah.

One thing I’ll say about penalties overall, which is really, really interesting, whether it’s penalties with Social Security or penalties with TSP issues or other things like that, sometimes there are ways to get around penalties.

I was in a workshop one time. I was where was I? I was in Austin, Texas, and we had a lot of IRS people who attended that workshop. Oh, boy. Yeah.

I mean, you’ve got to be really careful right now. And that’s what think I got to say about IRS people coming sometimes, you know, when I say, OK, who works for the IRS, they don’t all raise their hands because they’re a little shy about saying that. I were you know, they say I worked for the Department of Treasury and I look at them and I think, like, yeah, I know you work for the IRS.

It’s OK. But a lot of IRS people are in this workshop and and there’s a penalty. And I won’t get into the details here because it’s off of this topic. But it has to do with penalties, with R&D that if you don’t make if you don’t do your R&D in time, there’s a 50 percent penalty. I mean, it’s a huge penalty.

And so I mentioned this and one of the IRS guys came up and he said, hey, by the way. There is an exception to that, he said, I work on that team, and any time anyone asks for an exception, we always give it. Oh, that’s good to know. No kidding. Whoa. So if if you hear that there’s a penalty and you get hit with a penalty, go see if there’s an exception. Go see if there’s something that you can do about it, because maybe but maybe not.

But if you can get an exception for that, then great. If you don’t know that you can even try to get an exception, then that possibility isn’t there. And you’ve just thrown money down the drain. And we want you to keep as much of your own money as humanly possible. So be careful is what I’m saying. Yeah.

So if you want this information to find out all the details about your benefits and really help us to to get you in a place where you’re coming from a knowledge base to make an actual decision earlier, you sound decision in your benefits, go to Fednobabble.com. We can give you that report and it lists out your pension, your special retirement supplement, FEHB, FEGLI, TSP, all of that information.

And it really is comprehensible. And also really easy to understand, though. And one of our trusted financial planners will reach out to you to get that information. So that way we can build a report for you and and you know that no cost, no obligation, no sales pitch. Right. We simply want to make sure that you’re getting the information that you need to set yourself up for success in retirement and.

Yeah. And also submit the question. Yeah, yeah, yeah.

If you want a question, if you want us to answer a question that you have about your federal benefits, go to Fednobabble.com. And there’s a form there that you can just submit it and we’ll get it.

And if we answer it on the show, we will give you a Fenobabble T-shirt, which is way cool these days. And also, if you would, please subscribe, follow, get notifications for Fenobabble overall so that when we post a new one, you’re learning and you’re right on top of things as things change because things change too often, I might say.

Yeah.

And share this with your friends because they’re retiring. They need to know this information just as much as you do. So thank you for being here. And until next time, take care.

 

5

#5 – Survivor Benefits – Military – Part B

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Survivor benefits, military, and Part B, all on today’s Fednobabble.com.

Welcome to Fenobabble where we make federal benefits understandable for humans in under 20 minutes.

That’s right. We are going to take your questions that you can submit at Fednobabble.com and questions from the workshops that I do of participants that just have random questions. And we take those and we answer them here to make it to make them very, very understandable. So Cassie, let’s go for question number one. My OK, this this one is complicated. So we have to figure out how to make this less complicated. This this one says, my husband is FERS and I am CSRS.

So if we stop just right there, there is a number of things that we could talk about just with that statement. But we’re going to be very specific and say continues, I cannot receive survivor benefits on his Social Security.

And as an addendum here, because CSRS employees do not pay Social Security, but I believe I can on his government pension, is that correct? OK, so what if he leaves you a portion of his government pension? You bet.

That depends on what the choices that you make are as far as what you’re choosing to do with your survivor benefits for your pension. OK, so let me just be clear, though. The survivor spouse benefits. A pension under FERS and CSRS, and then there’s a spousal benefit under Social Security, which are different and which are very two completely different things.

And so if her husband is FERS, she express so her husband can leave her either twenty five or fifty percent of his pension amount.

But she’s right.

There’s a government complicated for Social Security that pretty much says that anybody, whether you are state or federal employee who earned a pension.

That they did not have to pay into Social Security for such a CSRS because they don’t pay into Social Security, he was pay into the civil service retirement system. They will not.

And it’s not that they will be eligible for a spousal benefit, but the simple fact of how much they get for their pension offsets the cost of what they would form the Social Security spousal benefit.

So a lot of times it does not make sense like they would have to earn a pension of, I think, under eight or nine hundred dollars to even be eligible to receive anything from the spousal benefit. Express pensions just simply aren’t earned that low. Let’s be honest. And so because a lot of them are over a thousand dollars or more most of the time on a monthly basis than the it automatically just wipes out any spousal benefit that they would earn under that offset rule.

So this this is a great example of why it’s so important that this couple, whomever this is, and there are a lot of them out there that they visit a financial professional, this just this one topic alone for them, let alone the other topics that we could bring up that get complicated, especially with a federal couple, let alone a federal couple who won one of the first one of the Sirrs.

It gets so complicated that trying to work it out and understand all the rules that apply not only for pensions and survivor benefits and Social Security, but then we’re talking about, OK, when when do you take Social Security? It do you take does one take it earlier than the other? Do you take it at the same time? Should you not use the top of one rather than the TSP of another or one? Do the TSP and one do Social Security?

And what happens if one dies and it goes on and on and on and on?

So complicated. So yeah, this is just one or two pieces rather, of that financial picture that they really need to take a look at and and talk with somebody about to make sure that it doesn’t affect another puzzle, yet another piece of the puzzle that they’re trying to put together. Yep.

And like I said in the last episode, you’re right, because if if a federal couple if this federal couple makes a mistake because they’re trying to do it themselves, which is noble, I must say, if you’re trying to dig, if you can save some money and do it yourself, I mean, it doesn’t always work that way, though, right?

So if they can if they make a mistake in one area that does a domino effect, again, to other areas and sometimes they don’t catch it until 10 years later and they have no understanding of what it could have been. And they’re panicking at that point. Right. Because here’s the thing.

This federal employee couple may be able to take or may be able to leave a spousal benefit on the pension for that other spouse. But it almost doesn’t make sense to because there’s another way where they can protect the income that their spouse needs.

And not maybe paid as much, right?

OK, so there there are ways to cover the income of a spousal that a spouse needs if something were to happen and and maybe the spousal benefit program isn’t the way to go.

Mm hmm. And again, that spouse.

And then what happens if they die together then? So that person is paid right now for nothing.

I mean, Kevin you say something in your workshop about how this works the best. Yeah, right.

I don’t I don’t know what you’re referring to. OK, well, for the spousal benefit. Yeah. Yeah. It only works best if they’re going to retire. Oh yeah. Yeah pretty much. If it’s great if they retire and die on the same day. Right, really good. Yeah, I see what you mean. Yes, I mean, it’s perfect if that happens because you don’t pay anything and the spouse gets and I also say that you shouldn’t marry someone much younger than yourself so they can live a long time, too.

But that’s right. That’s horrible life advice.

Oh, I wouldn’t listen to that again, because we’re not financial professionals that take our Laidig advice.

We’re simply trying to point out some of these considerations that maybe stress points in your financial plan that you really need to take a look at.

Yeah, right. Because these things are so important to get right the first time, especially the spousal benefit, because that is one that once OPM finalizes that paperwork, you only have 18 months if you want to change that benefit, otherwise you’re stuck with it. It doesn’t matter if you choose that this plan or if you think that this plan is too expensive for you or if you’ve found another way to cover that spousal income or what have you and you’ve selected the max amount to give to your spouse, you’re stuck paying 10 percent for four years and almost 10 percent versus IRS employee of that pension amount for that spousal benefit.

So this is very, very critical for people to take a look at and make sure that they’re looking at this through the right lens and really making a split decision on if this is a good thing for them or not, you’ve got to have that knowledge base behind it.

You don’t Cassie. I did find one way around the whole thing that so there’s there’s 18 months, right? You have to make a decision or to change it. Right. There’s there’s another way to do it, and that’s to off your spouse.

But that advice, I don’t know, I, I wouldn’t I wouldn’t say. Yeah. Bad advice. OK, next one next question. Military buyback. How does that really work?

Oh boy. It you know what, I’m throwing this up. It depends. It depends because. It depends when you do it, because the longer you wait, the more expensive it’s going to be. And I know people, people who come into the workshop all the time and they say, you know, I’m looking at buying time, my my military time back, and and I say, OK, how long ago did you work? You know, did you work or were you in the military?

And they say, oh, 20 years ago. And I think, oh, my goodness, this could be quite a chunk of money that you’ve got to pay back. It’s not an easy thing then.

Yeah, it for any deposit or redeposit service, there’s interest added the longer you wait to make that happen. OK, and for military service in particular, you really have to make sure that it’s worth it. Right.

OK, if you are at back up, if you’ve retired from the military and you’re above and six or seven, it may not make financial sense for you to do that unless you are a reserve, because as we know, military reserve people get both pensions. However, if you are active duty military. You really have to take a look at this. OK, but the process to go and find out how much that deposit is, because that’s really going to be the key, is finding out that number to make sure you have to find out how much it adds to your pension and what that deposit is and how long it’s going to take you in retirement to recoup money that you paid into that deposit.

OK, but there’s really two forms. To to make that happen. So one is R1 20- 97 that they submit to DFAS.

OK, that’s going to give them their earnings because the military deposit is based on the earnings that an employee had inservice OK in February.

And then they’ll fill out another form for and it’s thirty one 08 that they will fill out to find out how much they have to pay back into firms to get credit for that military service.

OK. And so that’s for first employees. Let’s see see us address it. That is really dependent on one when that service was because some employees and this has to be like a long time ago, military service, but some employees, it doesn’t make sense to make a deposit because they could get credit for it anyways. Right.

And so they as ours, it’s a whole nother can of worms, but we really have to ask somebody to find out if it’s worth it.

Yeah, that’s. And I think the thing that. The thing that messes people up here, I think at the very, very beginning again, are the shortcut phrases and this is what I hear. It’s worth it to buy your military time back if you didn’t retire. Well, that it depends, it all depends, it depends. It does. I mean, sometimes if you did not retire from the military, it’s still not worth it to buy it back.

Sometimes if you did retire from the military, it is worth it to buy it back and really, really worth it to buy it back, but to go buy those shortcut phrases, to make financial decisions that we can, you know, I mean. Oh, you know what? I retired from the military. I remember one gentleman what he had to pay. He was told exactly that you shouldn’t buy it back if you retired. And so he didn’t.

And then he then he came to us. We did the report for him and he learned that he could if he paid, I think. And that could be a little wrong here, but I think it was if he paid ten thousand dollars, he would get I think it was another ten thousand dollars every year for the rest of his life or something ridiculous that something really cool like that.

Yeah, it’s very close to. Sorry, go ahead. I do these calculations all the time, yeah, and. More often than not, if somebody is not retired, typically it’s worth it, I say typically because again, not always is it worth it. However, typically it is. And it’s amazing to me how people don’t realize that if they pay, you know, ten thousand or twenty thousand dollars, then getting that back within just a couple of years of retirement.

Yeah, that is not uncommon. Right. OK. However, if they’ve retired from the military, a lot of times they’re losing money because the military pension, again, is based on what they earned in the military. And that calculation is different than what artisan’s.

And so, you know, if people are in the process of buying back military service and I recognize that it’s not worth it for them because they’re going to lose five thousand dollars a time in a year, then they could start that process and get it back.

And I want to say, even if they’ve made a deposit, there’s a way to get it back to pay.

But you really have to make sure that you do that prior to retirement, because once you’ve retired, that’s it.

Think back, you know, figure out if you know, if I if I buy my military back that I can increase to my pension. No, that’s not how it works after retirement. Like, you really have to dig down deep into the earth and find out these numbers prior to. Right. And I don’t mean like a month prior to I don’t mean, you know, five months prior to that. You need to figure this out as soon as possible, because if it is worth it to make a deposit, you want to make as low as a deposit as possible.

You don’t want to have to wait until you’re looking at six months or so before retirement because then you’ve accrued that much more interest the longer you wait. So definitely something that really looked at from somebody who understands the federal benefits and you know a little bit about the military service and this is something that we help our advisers with all the time. They really appreciate because H.R. even gave us bad advice for military service. They don’t always know how it works.

I’ve had to screenshot and give the advisor the regulation that says, yes, somebody is eligible to make a deposit for their reserve service because somebody has been told by a VA that wasn’t true.

Yep, yep. I think would it make it easier for the reserve service? And so those little to definitely have to be dealt with as soon as possible.

Yeah. Can you imagine. Oh, boy. Having military pension, federal employee pension. Military TSP. Federal employee TSP, Social Security and and survivor benefits and really at that point, the combinations are endless. How do you maximize the amount of money you get? That is a mystery that has to be done with precision. And the well and the other thing that I get a lot of time with very is the misconceptions or misunderstanding between FEHB and TRICARE.

Yes. Who is eligible?

What can I do with those benefits? Am I going to be able to have TRICARE and as an option in retirement, or do I just have FEHB and then Medicare on top of that because TRICARE has to enroll in Medicare. So you’ve got to make sure that if they are taking that TRICARE that they’re also doing the other things. And so that is another big piece of the puzzle. That is something that needs to be planned out in the chairman planning process for folks who have military service.

And they really need to understand what that benefit is as well. Yeah, right.

OK, we have less than two minutes and we have a question left, so we got to do that and wrap it up. Here’s a question. I did not sign up for Medicare Part B because I was working and had BCBS can I sign up for Part B when I retire? The answer is if you’re 65. Yes. Done. OK, yes. And if you’re older than 65 and you want to avoid that Part B penalty check with a Medicare specialist in your area or go to the service website because the Centers for Medicare and Medicaid Services are going to require a waiver that you’ve had employer coverage.

It’s pretty simple. I say, quote unquote, simple.

They try and make it easy for people, but definitely get with a Medicare specialist in your area and to make sure that you’re getting the correct paperwork in there. So you’re avoiding the penalties that go along for not enrolling in part B, it’s available at sixty five.

Yep. Good. Thank you. All right. If you want if you want a report created by Cassie all about your benefits and it’s crazy detailed, crazy comprehensive. Just go to Fednobabble.com and it’s there’s no cost, no obligation, no sales pitch, nothing, no strings attached. And you can get that report. And if you want to ask a question, go to Fednobabble.com. And if we use your question, we will send you a Fenobabble T-shirt or maybe even a Fenobabble face mask just for the fun of it.

Halloween is coming up. You never know.

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