Episode Transcript
[00:00:00] Speaker A: Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.
Welcome to Reyna Retirement. Reyna Reyes has dedicated her career to helping people make small, smarter financial decisions. Reina retirement is all about breaking down complex financial concepts into language you can actually understand.
Now here's the co founder of American Federal Benefits Consultants, Reina Reyes.
[00:00:39] Speaker B: Anyone in my generation remembers the cereal commercial where the guy's eating cereal and it's so good and.
And the wife says, what is that? And he goes, nothing, honey. And she goes, well, if you're not going to tell me, then fine. He's like, yeah, it's not honey. And she goes, well, fine, then just don't tell me. But of course he's talking about the name of the cereal. Well, we all know that spouses have fun misunderstandings and misinterpretations and they mishear each other. And this is what we want to talk about today. We want to talk with our spouses.
What are some things that spouses have in benefit? As a benefit, what are you entitled to? What is yours? What's automatic? What are the choices? What are things you want to be a part of? And why do you want to be in the retirement meeting when your sweetheart, honey bunches of love schedules a meeting with me and my team? Because there's things to go over, things you have to approve. Sometimes you need your signature on stuff. So let's go over, what are some of the things you as a spouse want to be aware of and sure of and understand when your other half is a federal or postal employee. So first of all, what is automatic for me as a spouse? Well, if your spouse is working and they pass away, it is automatic for you to get a survivor benefit depending on some rules and some time, distance of marriage, you know, years of service, things like that. But it would be an automatic survivor benefit. Same thing with life insurance and TSP and things like that. If there is no beneficiary named otherwise, then the spouse is automatically the first beneficiary of life insurance and tsp. It's just automatic. They call it the order of precedence, I.e. spouse, kids, parents, estate, and then next of kin.
So that is just the order. That's the way it goes. That's the way the cookie crumbles, that's the way it falls, and that is Automatic. You're also entitled to some of this stuff. And sometimes if you're going to waive it, you got to give your permission.
So what's the next thing here? What are some of these questions? What is a survivor benefit? So spouses, remember, we all know the legal term that you are entitled to 50% of the assets, 50% of your whatever, if something were to, if you were to separate. But the deal is a survivor benefit is maximum 50% of that monthly pension that your retired spouse is getting or will get.
So technically, you're entitled to it. If y' all collectively or we in our meeting or whoever decide that it needs to be a lower survivor benefit, maybe partial or none at all, you've got to sign a form in front of a notary to say that you're cool with that and that you accept that, you understand that you would be receiving a lower or no survivor benefit. Same thing if it goes to a former spouse. You've got to approve that too, essentially, but you don't really have a choice. But you've got to acknowledge it.
So that's what the survivor benefit. It's a monthly benefit to you forever. That allows you to also keep the next question. Health insurance. If there is no survivor benefit to you as a spouse and the other and the retiree passed away, only then would there be no health insurance for you. Whether there's one or not, you maintain the health insurance while they're living naturally. But if you were to pass. Sorry, now who's on first? What's on thirds in my head, naturally, Third base. So that's how you can keep it is only if you had a survivor benefit when they passed away and if you were on the health insurance.
So you can have health insurance as long as you're on the health insurance by virtue of being a family code or a self plus one code, that is. Remember, every health insurance plan has three enrollment codes. That's self, self plus one and self and family. And as long as you are covered by one of those latter two, then you automatically have that health insurance. And if there was a survivor benefit when your person passed away, then you simply maintain the health insurance indefinitely.
So here's the other rub, though. If you have it on your own job and that's what you have, and you didn't have it from theirs when they passed away, even if you had a survival benefit, you don't get to keep it because you got to be on it at the time. That's why they call it a continuation. You're Continuing it. You're not kicking it off, you're not starting it, you're not enrolling in it. What's another thing spouses need to know? Are you entitled to tsp?
Well, yeah, you. They had, they spout they spoused long time ago. They spoused it. They passed the Spousal Protection act quite a while ago where these spouses are protected and whenever money leaves tsp, the spouse has to give it the go ahead. And the way they do that now, it's a simple email.
Used to be DocuSign, now it's Adobe Sign where when your employee or retiree other half is taking a withdrawal, it's got to get an email sent to you for you to John Hancock that in approval. And they say that you are waiving your rights to this money.
Essentially that means that you're allowing it to leave to go to another location that may not have those same protections is what it is. It's neither good nor bad, it's just a fact.
And you do have to give those permissions con permiso to leave the TSP in any way, shape, form or fashion.
So how can you be the beneficiary of life insurance? Well, remember, it's automatic if there is no beneficiary listed and you probably want to go ahead and be sure that that is how it's listed if you are questioning or concerning it. How can I make sure? Can I go look and see who's a beneficiary? Yeah, but it's a very difficult, it's just nonsense. It's easier to simply write a new beneficiary form and submit it.
The last one always wins. So whatever form you submit, your name is primary and then whoever else is secondary and then you know it, you've got it dated and you just submit it. That makes it for sure 100% and it is good to do that especially.
And I think a lot of people really beat on this too much. But if you ever, if, if your spouse who is the employee or retiree was ever married before, I'm a big fan of simply submitting a new beneficiary form regardless of whether you thought they were there or not. Because people do shady stuff and I would just simply submit a new beneficiary form for everything, life insurance, unpaid compensation and then obviously log in the TSP website and make sure the beneficiaries are the way they are. And that's the other bit. You want to be the beneficiary of TSP as well. Because again, just because it Defaults to you if there's no beneficiary listed doesn't mean that it stays that way because the employee retiree can name anybody as their beneficiary for life insurance and tsp.
That's what's crazy. You don't have to approve the change of beneficiary. You do have to approve the withdrawal of funds. So spouses, you want to be in the meeting because these elections matter to you. Life insurance is a big deal. How much am I? How much is there? If something happens, do I get it? Let's look at the beneficiary forms. Do. What are we paying for a survivor benefit? Is it worth it? Do I have my own pension? Do I have my own health insurance? Am I on Medicare? Do I need the money?
You want to be in these meetings for sure. So whenever you say to me, hey, Raina, I want to get scheduled with you, I'm going to say what time is best for both of you. This is not a unilateral scenario. Retirement affects everyone in your family but your spouse, primarily because they need to know what's going on while you're receiving your money.
And if something happened. And they need to also know my number, because spouses write my number down, plug it into your number, make me a contact, put me at top 10 if something ever happened to your spouse. Kids, put me as top 10 if something ever happened to your parents. Because I can help you with all the claims, all the forms for Life Insurance and TSP and any outside IRAs that you have. That number is 850-450-6500. You can call me, text me, whatever, and if I'm not available, I've got a team member that is. And we live it, we breathe it, we can help you. And we keep these documents ready at all times to help you as fast as possible.
So there's your quick synopsis for my spouses. For the sweethearts, the honey bunches of love, don't accept the nut and honey because it is something honey. And we want to have you in the meeting to go over these choices because they last forever. We'll talk to you soon.
[00:08:42] Speaker A: Thanks for listening to Reyna. Retirement. With a strong commitment to ethical standards, Raina works hard to find the right solution for each individual or family who reaches out for advice. To contact rina directly, call 850-450-6500. That's 850-450-6500. Or to reach the team at American Federal Benefits Consultants, call 1-800-872-8857. That's 1-800-872- 8857. You can also go online to americanfederal.org not affiliated with the United States Government. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. The information is intended to be educational in nature and does not provide a guarantee or specific result. All copyrights and trademarks are the property of their respective owners. American Federal Benefits Consultants is an independent organization, not a government agency or affiliated with the Federal Government or any state government. The terms CSRS, FERS, FEGLI and FEHB are all registered trademarks of the U.S. office of Personnel Management. American Federal Benefits Consultants, agents, consultants or any independent contractors do not provide tax, legal or investment advice and do not engage in the solicitation or sale of securities. Consult with your tax advisor or attorney regarding specific situations.
