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. Reyna 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, Reyna Reyes.
[00:00:40] Speaker B: Love and marriage part 2 now, if you have questions on survivor benefits, so do a lot of other people. Here are some of the top questions. Number one, what if I retire and then get married? Can I add a survivor benefit? Yes, there's some time limit restrictions, but you can add that for sure.
What if. Question number two, what if I retire and I leave a full survivor benefit but my spouse passes away first? What happens then?
Well, you get a raise.
Okay, I'll stop. Morbid joke, morbid joke. Forgive me, but you were paying say 200 bucks a month. Now you stop paying, paying the money, they stop deducting it out of your pension because there's no one to leave that benefit to you any longer. So now instead of like, let's say your balance, your pension was $2,000 a month and you were paying 200. Now you're back up to $2,000 a month growth.
So that's another, another question. So another question we get here. Number three, what, what happens with the health insurance if I retire and don't leave a survivor benefit? Well, this was kind of mentioned in that first video. But here's the deal. If I retire and leave no survivor benefit, but I'm married and the spouse is on my health insurance, nothing happens.
Everything stays status quo. Your spouse stays on the health insurance as long as you are living, which I would advise you to do as long as possible.
And the benefit of that is that maybe you're not spending the money on a survivor benefit, but they are benefiting from the health insurance. So as long as you're alive, you, it doesn't matter for the health insurance whether or not you have a survivor benefit. Note the word survivor. It's only if you pass away that it determines whether or not your surviving spouse can continue, keyword, continue, the health insurance.
And here's the other trigger, or the kicker or the rub or the beef.
Here's the other thing.
Your spouse has to be on the health insurance when you pass away in order to Keep it.
Whether you have a survivor benefit, like if you have a survivor benefit, even with it, if your spouse is on their state employee health insurance the day you die, survivor benefit or not, they ain't keeping the FEHB or the pshp. They're not keeping what you had because they're not on it. That's what I mean by continue is the key word because it's a continuation of coverage. You just stay on the boat. All things in motion tend to stay in motion. You just keep rolling, rolling on a river. You're just going to keep staying on there, Proud Mary.
But if you're not on it, you can't continue. Right. You can't just magically create that. So I've had this happen before where, oh, I got a survivor benefit. I'm good to go. I need to enroll. No, it's a continuation, not an enrollment opportunity. This is not some, it's not an installment election period.
So that's a big, big factor that affects, you know, a subset of people that have multiple type of health insurance plans. And then that's the other side of it. What happens if I don't need the money or the health insurance at all and I don't leave a survivor benefit? But I want to change health insurance. Remember, you can change health insurance every single year at open enrollment.
That has nothing to do with the five years, has nothing to do with anything as long as you're changing your health insurance. Within the spectrum of the federal health plans, Blue Cross, Kiha Aetna, ticket name, mail handlers, all the stuff you're changing within their, within their serving size, you're at the restaurant, you're only eating that restaurant's food. You didn't bring in Pizza Hut to the Continental restaurant.
Right? That's, that's, that's different. But you're changing within the plans that they offered you. So as long as you're within a fed offered plan or postal offered plan, absolutely you are continuing on with your five consecutive years to have that health insurance in retirement. Now, people say, what about the disabled child survivor benefit? How much does it cost? It doesn't. There is a automatic survivor benefit. It's not half or a quarter. It's a designated number, depending on how many children there are, you know, and things like that. But it's a set number to allow them to maintain the health insurance. That's the only reason it exists.
So they can maintain that because of that disability. And you have to prove that. Of course, you got the documentation and all of that. So Human resources needs to know it if you're an employee. And OPM is going to need to know it if you're a retiree. So you need to be super clear that everybody knows about that disabled status for sure.
And seven years ago, no, I'm kidding. It sounded like four score. Just made me laugh. But you have a lot of choices with that. But remember, even a partial survivor benefit will guarantee that your surviving spouse gets to maintain the health insurance that you currently have. And side note. Oh, here's the other big question I get. Hey, Reyna, we're Twinkies.
We don't want to leave a survivor benefit.
Well, most of my Twinkies don't leave a survivor benefit if they're retiring with similar years of service. So like if you both got hired around the same time, you both have your 30 years, you're both retiring around the same time, it's kind of a wash, right? I could spend this to give you this. You spend this to give me this. It doesn't really do anything for us. So a lot of times Twinkies won't do a survivor benefit because it doesn't matter. First of all, if one is carrying family coverage and the other is just a dependent or listed as a dependent on that family coverage and then that primary passes away, it doesn't matter. The dependent, who is still a federal employee, simply continues that coverage. So they don't need a survivor benefit to continue coverage they've had as a federal employee for five years. Also, they both had the five year rule. So satisfied, even though it was under the name of another federal employee. Right. So that is pretty awesome in the world of Twinkies. So people say, oh, why do you call them Twinkies? Well, you're just trying to be cute. No, it just, it means something. First of all, Twinkies, when we ate them, remember, it was two of the same thing in a little package. Right? But it means something. Equals survivor benefit question, Health insurance question. Because again, most of my Twinkies, if you have no children on your health plan, you should unequivocally be on self only coverage, each of you. Because there are, there may be one health plan or two health plans in America where having two self only enrollments rather than cell plus one saves you a significant amount of money. Average 100 bucks a month. Holy cow, Raina. What? Yeah, 100 bucks a month average savings by going from cell plus one to, to self only, both of you for your health insurance. And you get the same plan, you're on the same Plan, which is a different enrollment code and a different price because you've got two individual enrollments rather than one sort of package deal. And remember, that's long since been the. The ruse of what I would. Not the fast food industry, but just like, oh, these value packages and you do the math and you're like, what's out? I'm less expensive if I buy it all. A car, why would I put it in the package? Well, convenience, right? Oh, number one, sorry, I digress. But the health insurance does it too. Hey, you want to put it in a little package deal? We're going to charge you another hundred bucks a month for your convenience. Split it off if you're both federal or postal or whatever and have no kids to put on there. If you have kids, obviously you need the family plan, but these are some things to consider, things to remember and things. And also reasons to have a meeting with me and my team. Because what you're not hearing me talk about is, hey, let me sell you something. A lot of people that are on here under the guise of benefits are there for a pitch or an offer. If there's something that you need, anybody, we can help you, of course. But our main goal is to get you retired the right way because we have to talk to you probably for the rest of your life. And your family as beneficiaries will reach out to us if something happened so we can help them with that as well. So, happy work, happy retirement, happy meeting. Let's talk and make a plan for you that will last forever.
[00:09:02] 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 Reina directly, call 850-450-6500. 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, FELI, 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.
