What Happens to Your Benefits If You Die After You Retire?

By on April 1, 2013 in Current Events, Retirement with 36 Comments

Note: A new version of this article with more current information is available at http://www.fedsmith.com/2016/03/17/what-happens-to-your-benefits-if-you-die-after-you-retire-2/

Your spouse will be able to keep your health insurance if two conditions are met.  First, you must have elected a survivor annuity.  Second, your spouse must be enrolled with you on a self and family policy on the date of your death.  If these conditions are met, you spouse will be able to continue your health insurance and Uncle will continue to pay his share.

Your life insurance will be paid to your designated beneficiary.  Your beneficiary will be given a choice of a “Total Control Account” (a type of retained asset account) from MetLife, or of receiving payment of the death benefits by check/deposit.  If your beneficiary does not make a choice, they will be given the account.

Speaking of beneficiary forms, do you know who your beneficiaries are?  If you have any doubt, you may wish to check your Official Personnel Folder (OPF).  The last thing you want is having your ex-spouse walking off with all you have saved over your career.

If you elected survivor benefits for your spouse at the time of retirement (or at the time of marriage, if after retirement) your spouse will begin collecting a survivor benefit after your death.

Under CSRS, survivor benefits can be as much as 55% of your annuity.  You may elect lesser amounts, but spousal consent is required at the time.

Under FERS, survivor benefits can be either 50% or 25% of you annuity.  Spousal consent is required for the 25% survivor benefit.

COLAs are paid on survivor benefits for CSRS and FERS.  If your spouse remarries before the age of 55 they forfeit their survivor benefit.

If you did not elect a survivor benefit, your designated beneficiary is entitled to a refund of any of your contributions that have not been paid to you.  OPM views you as recouping your contributions dollar-for-dollar beginning at retirement, so if you die more than a few years after retirement, there will be nothing to recoup.

Your TSP will go to your designated beneficiary.  If your beneficiary is your spouse, and is also a federal employee or retiree, they may combine your TSP account with their own.  If your beneficiary is your spouse who is not a federal employee or retiree, they may take ownership of your account, but may not make any deposits.  Your spouse could also choose to elect an inherited IRA or withdraw the money.

If your TSP beneficiary is a non-spouse, they may elect an inherited IRA or take the money out.  In all cases, the beneficiary would be responsible for any deferred taxes.

John Grobe’s latest book, The Answer Book on Your Federal Employee Benefits, has just been released by LRP Publications. The book is written in an easy to understand question and answer format and covers all areas of federal benefits from the perspective of an employee at various stages of their career. Order your copy at shoplrp.com.

© 2016 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.


About the Author

John Grobe is President of Federal Career Experts, a consulting firm that specializes in federal retirement and career transition issues. He is also affiliated with TSP Safety Net. John retired from federal service after 25 years of progressively more responsible human resources positions. He is the author of Understanding the Federal Retirement Systems and Career Transition: A Guide for Federal Employees, both published by the Federal Management Institute. Federal Career Experts provides pre-retirement seminars for a wide variety of federal agencies.

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  1. Cathy says:

    As a retiree, when I reach the age to begin receiving Medicare, do I still continue to pay for my individual medical insurance at the same rate it is today?

  2. Rkeevill says:

    Question:  I once heard that if the federal retiree should die, the TSP account goes to the beneficiary.  However, this only applies to the retiree’s contributions.  The federal government’s contributions to the retiree’ s account do not go to the beneficiary.  Is this true?  

  3. Stat Man says:

    John, you state…If your spouse remarries before the age of 55 they forfeit their survivor benefit. I thought if you were married for 30 years it doesn’t matter how old the spouse is and can retain survivor benefits if they remarry at any age. Please clarify. Thanks.

    • contspec says:

      I believe John is right that the spouse would lose survivor benefits if remarries before the age of 55.  I don’t think it matters how long your were married.  In the retirement classes that I went to, they mentioned that 55 was the “magic number” to retain benefits.

  4. Aedv703 says:

    I am planning to retire in 3 months after 32 years of service at 57 years.  I have never married. I have two children ages 11 and 17.  I plan to elect no survivor benefit.  What happens to my benefits if I die say 3- 5 years after I retire.

    • contspec says:

      I hope the other parent of your children has health insurance for them.  I believe that they would lose the ability to continue health insurance, if there isn’t a survivor benefit.  COBRA is available for 18 months but they would have to pay the full cost of the insurance plus an administrative fee.

    • law lookups says:

      how can u have 2 kids and never were “married”? if commonlaw-see ur state law-it is seen as “married” and see law for children minors of deceased parents

  5. WorkUntilYouDie says:

    While I appreciate the information, I’m not planning to die after I retire. 

    The Obama policies and economy will force me to work until I die on the job to pay for Obamacare for illegals, contraceptives for sexually promiscuous  10-year career college students like Sandra Fluke, and newly covered add-a-dick-to-me operations now being considered (via ObamaCare) to be covered by Medicare.

    And with Lord Bernanke working hard to print money, my TSP will be worth 30% of what it is now by the time I retire, and a loaf of bread will be $315.52.

    God bless America.

  6. Itsjustmeagain1 says:

    Serious question.

    What if a retired member committed suicide after retirement?  How will that impact survivor annuity, life insurance and health insurance?

    There are a number who served in the NG and Reserves who served in the middle East with problems.  Some just have deep depression.

  7. Stat Man says:

    John, you state…COLAs are paid on survivor benefits for CSRS and FERS. If your spouse remarries before the age of 55 they forfeit their survivor benefit.

    Isn’t also true that if you are married for 30 years then your spouse can remarry at any time with losing survivor benefits?

  8. Annonymous says:

    I thought there were 3 requirements that had to be met in order for your wife to continue health insurance if you died in service. In addition to the two mentioned, I thought you had to have 10-years of service unless you were retirement eligible upon your death?

  9. Patrice Meczkowski says:

    My spouse and I are both covered under the CSRS retirement system. He is with the USPS, and has always carried the health insurance family coverage.  We are still currently employed and plan to retire in 2 to 3 years.   If he does not elect survivor benefits at the time of retirement,  and passes away, will I still be covered under his health insurance? 

    • LaborAttorney says:

      No.  “If he does not elect survivor benefits “,

    • Guest says:

      Nope. But he only needs to give you the minimum, as little as a dollar a month I believe, for it to count. Assuming you do not have other dependents in your retirement, you might find marginal savings by each of you having individual coverage under FEHB rather than family. You should not face the five year coverage problem as you are covered currently and enroll during the next open season. Check with your HR office to confirm.

    • WorkUntilYouDie says:

       just claim that you were  transgendered and an undocumented worker owing taxes to the IRS — that will fully satisfy any claim for benefits under the Obama administration

    • LL says:

      No, he must elect survivor benefits for you to continue with that insurance, but he can elect as little as $1.00 a month for you.  You will have to sign the paper agreeing to this $1.00.  I would do this since the USPS insurance is so much less than the rest of Civil Service. 

    • $15300432 says:

      No, but at that time you can enroll on your own

  10. gobama84 says:

    My spouse and I are both retired civil service.  We both chose no survivor benefits.  So what happens if I die first and I have the health insurance coming out of my retirement check for both of us?  Will she then be able to add the insurance to her retirement if she met all the requirements at the time to keep it in her retirement?

    • retireddod says:

      I understand why you chose not to have survivor benefits, but without them, she has no insurance until the open season if you should die before then.  Hopefully you will live long and prosper and dont have to worry about it for years, but its something she will neeed to do eventually.

      • FedPAinIdaho says:

        Wouldn’t the death of a spouse be a qualifying life event for the purposes of making an open season election?

      • BobLoblaw says:

        I’m pretty sure that she would be able to immediately pick up her own coverage under the FEHB upon his death, if she is eligible from her own fed service and has been covered by the FEHB for 5 years…..no matter which of them carried the coverage.  This would certainly be one of those “qualifying life events”. 

      • kcdonjwn says:

        I think she would be able to immediately sign up for the FEHB as a result of her own retired CS status, so long as she met the 5-year rule.

    • Retired Fed says:

      I often wondered why a retired civil service couple choose to select no survivor benefits.  To save the 10 percent cut?  Figure this out.  Assuming both have the same income and years, you would have 180% of one basic retirement income.  If one dies, his/her income would be 155% (one annuity going back up to 100% plus the survivor annuity) vice 100%.  You get used to 200% and you would take a big hit going down to half.  It would be a lot easier going from 180 to 155%.  The widow/widower would still have bills that would NOT go down such as utilites, car insurance, any mortgages, etc.

    • Norm from GA says:

       Since the health insurance for both of you is coming out of your check, may I presume that you are enrolled in a family plan?  If so, why not get Self-Only plans for each of you?  It would be cheaper, and this question would be moot.  Of course, if you have children under 26 at home or at school, this plan may not be viable.

  11. BlakeLake says:

    What exactly is “Official Personnel Folder (OPF)” and where is it located?

    • J Beliveau says:

      Its now called eOPF on line. Its a pdf copy of everything that used to be in your opf and now contains all changes electronically.

    • Bob Nims says:

      OPF is basically an electronic version of Govt employee personnel files…I am not sure if all Fed Govt agencies use the system or not.  If you don’t know about it…it likely doesnt affect you.

      • TheRealOldFed says:

        The OPF was hardcopy for nearly everyone until very recently. Only a few Agencies have an electronic version now. Every single employee of the Federal government has one. When you resign or retire, the hard copy goes to the National Personnel Records Center in St. Louis. It is critical that you know where your OPF is, who has control of it, and review all the documents in it to make sure they are correct. I have seen families lose out on life insurance and other benefits because the employee failed to file an updated Designation of Beneficiary, and all the money went to an ex-spouse.

    • TheRealOldFed says:

      Your Official Personnel Folder is an important collection of documents about your Civil Service employment. Every single employee has one. Depending on which Agency you work for, it is either a hardcopy, which is held by your Agency’s Personnel Office (Human Resources), or it can be electronic, like the Navy’s “eOPF.” It is critical that you review all the documentation in your OPF to make absolutely sure it is correct. If one of your Form 50’s is wrong, it can take months to get it corrected. Contact your local Human Resources or Personnel Office. Ask your Supervisor, if you don’t know how to do that.

  12. Blklakeeriesouth says:

    What is “Official Personnel Folder (OPF)” and where is it located?

  13. Retired and still living says:

    “If you die after you retire”…….isnt that a certainty?  Can you opt not to die?