How Are Survivor Benefits Calculated?

Even if you didn’t choose a survivor annuity for your spouse when you retired, the federal government would pay a survivor annuity to your children if they are the surviving dependents of a deceased federal employee or retiree.

To be considered a dependent, your child must be under the age of 18 and single. One’s dependents can be any of the following:

  1. An adopted child
  2. A stepchild (but only if the stepchild lived with you in a regular parent-child relationship)
  3. A recognized natural child
  4. A child with whom one had been living and for whom one had filed a petition for adoption, and who is adopted by one’s surviving spouse after the death of the petitioning parent

Suppose your unmarried, dependent kid is between 18 and 22 and is enrolled in and actively participating in an accredited institution of higher education. In that case, they are exempt from the age requirement. It is also not required of a dependent child who cannot work due to a mental or physical disability sustained before 18, as long as that child is both unable to work and unmarried.

Please be aware that you must furnish OPM with information about your child’s schooling, work (if applicable), and domicile for your child to be considered for such a benefit. Your child’s doctor must also supply details regarding your child’s health. OPM Form RI 25-43, which provides a summary of the required data, can be found at agency personnel offices or online at www.opm.gov/forms. Also, the Social Security Administration‘s payment to a child or children of a FERS or CSRS Offset employee or retiree will diminish that person’s benefit.

CSRS and FERS employees and retirees are subject to the same regulations regarding annuity payments to children. However, the Social Security benefit payable based on the employee’s or retiree’s Social Security-covered federal service will lower the annuity payments made to the employee’s or retiree’s child under CSRS-Offset or FERS.

With each cost-of-living increase for retirees, the formula used to calculate the annuity payment is updated to reflect the new reality (COLA). The annuity benefit payable is the lesser of approximately $6,000 per month per child or approximately $1,800 per month divided by the number of eligible children. Rates vary slightly; however, in cases where a child has a living parent who was a current or former spouse of the deceased employee/retiree, the benefit is payable.

Suppose a child does not have a living parent who was married to a dead employee or retiree. In that case, the benefit payable is the lesser of $700 per month per child or $2,100 per month divided by the number of eligible children.

The annuity rate will be the smaller of the two relevant numbers regardless of whether one, two, or three children are eligible for an annuity. When there are four or more family members, the cost per child declines correspondingly.

An increase is made to the annuity if the spouse of the employee/retiree predeceases the child. Other factors may also necessitate a change in benefits. Suppose an annuity is provided to more than three children, and one loses eligibility for any reason, such as turning 18. In that case, the annuities of the remaining children are increased prospectively.

Suppose an eligible child survives the employee or retiree. In that case, they will receive survivor annuity payments on the first month following the employee’s or retiree’s death. They will continue to receive payments until the last day of the month before the child’s death, marriage, or, if over 18, the month in which the child becomes financially independent.

Contact Information:
Email: tcarmack@hotmail.com
Phone: 6232511574

Bio:
I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.

Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.

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I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.

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