Thread: FER's Survivor Benefit

When we retire, most of us select the FERs full survivor benefit option. This affords our spouse 50% of our FERs annuity and the right to continue FEHB benefits if we die first.

With the advent of the Affordable Care Act (referred to as Obama Care) health exchanges will be available for the uninsured. I will be young when i retire, 49 (as will be my spouse) so I was going to select the survivor benefit primarily so my wife would have affordable health benefits until Medicare age. After reaching medicare, I don't see where FEHB is really worth the cost as there are supplemental plans available, i.e., Secure Horizons, which my parents have and are happy with. Maybe I am wrong? Retirees on medicare chime in.

I can get a $500,000 life insurance through WAEPA for less than a third of the amount that will be taken from my retirement monthly for age 50-54 and it will still be less than half of the amount when I am age 55-59. Of course that might change over time, but I think it would still be less than the 10% reduction from my FERs. At age 60 the max life insurance I can purchase would be $200,000. But at this age my wife would have my TSP and our assets (small inheritance, house, etc) so she wouldn't need the life insurance. Doing basic calculations, the cash she would receive from an insurance policy would provide her larger monthly payments than my FER's annuity through either annuity payments or just about the same taking interest payments assuming 4%. And I believe she would be entitled to a Social Security survivor benefit if I died?

Most of us keep the survivor benefit to provide health care to our survivor. Is it worth it? Will the cost, and benefits provided by FEHB be that much better than health care under ACA?

What do you think? Pros and Cons. Especially some of you already retired. I am submitting my retirement paperwork next week and I am just not sure what to do?

Thank,