Planning for retirement can be a scary time. Many questions surround people as they start to think about retirement; Can I even afford to retire? When should I retire? Can I still have insurance coverage? Do I have to elect beneficiaries? Those, along with other questions, are important to think about as you enter this phase in your life.
Five Years Before Retirement
While it’s never too early to start planning for your retirement, the five-year before mark is an especially important one. This is because, in order to carry over any health and life insurance when you retire, you must carry coverage continuously for the five years immediately before retirement. Continuing health insurance in retirement is possible if:
- You maintain health insurance when you retire.
- Your annuity must begin within 30 days.
- You must maintain coverage for the 5 years immediately leading into retirement.
In retirement, you can keep basic life insurance if all the following apply:
- You are covered at the time you retire.
- The life insurance policy you have has not been converted into an individual policy.
- Your annuity begins within 30 days of retiring.
- You have coverage for the 5 years leading into retirement.
You may keep optional life insurance in retirement if you are eligible for basic life insurance and you have been covered by the optional plan for the 5 years immediately leading into retirement.
One Year Before Retirement
It becomes more critical at this point to double check your benefits and ensure that all your personal and work information is correct. The following are key to ensuring a smooth transition into retirement:
- Confirm that you are eligible to receive a retirement benefit.
- Decide on the date you want to retire and tell your supervisor.
- Ask about any other benefits you may be eligible to receive, including your TSP.
- Confirm your Official Personnel Folder (OPF) is complete and your insurance coverage is documented.
In addition to checking the aforementioned in your OPF, be sure to check for the following:
- The beginning and end date of employment. This is used for your benefit computation.
- Any effective dates of promotions. This is used for your High-3 salary.
- The dates of pay change where retirement deductions were not withheld.
- Any part-time or intermittent employment.
- Any military service dates.
Also, make sure that you have any beneficiaries designated. If there is not designation made, your benefits will be paid out in the following order, 1. Widow/widower, 2. Children in equal shares, 3. Parents in equal shares, 4. Appointed executor/administrator of your estate, and 5. Next of kin under the laws of the state in which you reside in when you die. By the same token, if you don’t provide a monthly benefit for survivor benefits, your survivor will not be able to continue with their FEHB.
Two Months Before
Hopefully, at this point, all of your designations have been made, and it’s just time to dot a few I’s and cross a few T’s. Your benefits can be calculated when your exact retirement date is chosen. Additionally, withdraw from your TSP (if you choose to do so) because it could take up to 8 weeks to process your withdrawal.
In the event that an injury or illness affects your job duties and you can no longer work, you may be eligible for a disability retirement. Of course, there is no way to plan for this happening, however knowing your options should this arise can help you plan for your next steps. Our team at Harris Federal Law Firm can help you if you find yourself in a situation like this. If this sounds like what you’re facing, please give us a call at 877-226-2723 or fill out this inquiry form for a FREE consultation.
