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Federal employees are promised an incredible retirement package and many feds think through every detail to make sure they are ready to stop working. That day finally comes and they submit their retirement application, but the transition isn’t as smooth as imagined. First, some of their retirement application forms are rejected because of a white out and then OPM has to go back and forth with your agency to verify your FEHB enrollment. The process gets messy and drawn out.
Most feds don’t realize how much of their retirement benefits are riding on that fact that their retirement application is filled out correctly. Not to mention that many of the decisions you make on the application will affect the rest of your life.
With all that being said, here are a number of things to think about when filling out your retirement application:
One of the biggest mistakes on applications are typos and areas left blank. For example, part of the application asks about a spouse or former spouse. This area has to be filled out even if an employee doesn’t have a spouse. You will want to ensure that everything is filled out and up to date.
Some key information that has to match what your agency has on record is your name, date of birth, and social security number. As I mentioned, no scratch-outs or white-outs will be accepted.
A married applicant has the chance to elect a survivor annuity for their spouse. This decision is very important. It will determine how much of your pension your spouse will continue to receive if you were to pass away. If you choose anything less than a full survivor annuity, your spouse will have to sign a consent form that is notarized and included with the application. Also, if you choose to not elect a survivor annuity at all, your spouse would not be able to continue under your FEHB once you pass away. This one decision can have huge consequences throughout your retirement.
Because health care costs have increased dramatically in recent years, your FEHB benefit has become an essential part of most retirement plans. In order to keep FEHB in retirement, you must have been enrolled during the 5 years before retirement. You will want to make sure there is documentation in your application that shows that you were covered during that time. Oftentimes, your agency will have documentation only for your most recent enrollment decision. If you made a change with the last 5 years, make sure you are able to show evidence of previous enrollments as well.
Conclusion:
Although this list is far from being comprehensive for all the retirement application mistakes, it should serve as a reminder to pay attention to the details. There are many decisions in life that don’t have a huge impact on our future but retirement decisions are not one of them. The good (and scary) news is that we have the power to educate ourselves and take responsibility for our retirement and futures. The government does provide tremendous benefits but it is still your responsibility to ensure that you use those benefits the best you can.