FERS Annuitant Spousal Survivor Benefits

Once a FERS annuitant passes away, their death status must be determined to establish the degree of separation from federal service, their FERS Retirement, and Disability Fund contributions and coverage, and whether they met the conditions to receive a FERS annuity alongside an immediate retirement. Additional requirements include having been deemed or filed for a retirement application before death.

Under the MRA+10 or MRA+20 retirement options, formerly FERS-covered employees who qualified for immediate retirement and died before applying are deemed to have completed the application. As a result, deceased individuals who meet qualifying conditions are thereby defined as FERS annuitants. For individuals who enrolled in a Federal Employees Health Benefits program at the point of separation from service, including “self and family” and “self plus one” enrollment, their eligible spouse can retain the FEHB insurance coverage after the beginning of the FERS survivor annuity.

The Surviving Spouse

You can provide for your spouse even after you are gone. However, it’s important to understand how the FERS surviving spousal benefits work before you go too far. Before it reduces according to the full survivor annuity benefit cost, a surviving spouse can receive up to 50% of the deceased FER annuity. A full FERS spousal survivor annuity will cost around 10% of the FERS annuitant’s beginning FERS gross annuity. Let’s take a look at a few examples of how this works.

1. When David retires at age 56 from federal service with a FERS annuity, he will do so on 35 years of federal employment. He provided his wife with a full FERS spousal survivor annuity (at 50%). After subtracting the cost of a full survivor annuity, the summary of David’s FERS annuity includes $45,000 of his starting gross annuity minus 10% ($4,500 fee to provide a full FERS annuity). This means David can provide his wife with a taxable net annuity of $40,500 (taxable).

   However, if David died before the FERS annuity received any COLA (cost-of-living adjustment), the survivor annuity would equal 50% of $45,000 ($22,500 taxable). If the annuitant opts for a “less than maximum” survivor annuity, the FERS spousal survivor annuity will further reduce to 25% of the employee’s unreduced annuity. The survivor spouse would have had to formally agree to receive the “less than maximum” election.

2. Another example involves Grace retiring at age 56 after 32 years of federal employment. She gave her husband a less-than-maximum survivor annuity (25%) with a starting FERS annuity of $50,000. Her husband had provided his consent, and after the 5% cost, Grace’s husband received benefits of $50,000 (Grace’s starting FERS annuity), minus a 5% fee ($2,500), for a total of $47,500 (taxable). Should Grace die before receiving a FERS COLA, her husband could expect to receive less than the maximum FERS starting annuity ($12,500 or 25% of $50,000).

Contact Information:
Email: rick@andrikfinancial.com
Phone: 9568933225

Bio:
Rick Viader is a Federal Retirement Consultant that uses proven strategies to help federal employees achieve their financial goals and make sure they receive all the benefits they worked so hard to achieve.

In helping federal employees, Rick has seen the need to offer retirement plan coaching where Human Resources departments either could not or were not able to assist. For almost 14 years, Rick has specialized in using federal government benefits and retirement systems to maximize retirement incomes.

His goals are to guide federal employees to achieve their financial goals while maximizing their retirement incomes.