Did you ever wish you had taken another career path? Maybe pursued your dream to play the zither, or run off to join a carnival?

Well, when it comes to financial security in retirement, few things beat being a fed. Or an ex-fed. In addition to an annuity indexed to inflation, feds can’t outlive their benefits. This includes health benefits which are rare and getting rarer for nonfeds.

Consider the following reports on what the average person is going to need in retirement to pay medical and hospital bills. Medical inflation is outpacing normal inflation in part because people are living longer, demanding more services, and because of the costs of new high-tech treatments. As one report put it this has “increased incidence of some chronic conditions, like diabetes” which is nearing epidemic proportions.

So if you are a typical 65-year old married couple retiring this year, how much will you need in the future to pay those medical bills? According to a new study by Fidelity Investments the answer is $225,000.

Here’s the good-news-bad-news:

The Associated Press reported that a recent study by the Center for Retirement Research (Boston College) estimated that about-to-retire individuals needed to have $102,000 in a health care kitty, while a married couple retiring this year would need about $206,000 to pay the bills. That’s better than Fidelity’s estimate of $225,000 per couple. But not much.

That’s the bad news.

The good news is that people retired from the federal government, or those retiring this year or in the future, won’t have to have that kind of money to pay their health care bills. Not if they have coverage under any of the health plans offered by the Federal Employee Health Benefits Program. FEHBP coverage is for life. The plans can not exclude anyone from coverage because of age, health or preexisting medical condition. Older, unwell retirees pay the same premiums as young, healthy workers in each plan. And the government, by law, will pay 70 to 72 percent of the total premium.

Lessons Learned

If you are a career fed, or retiree, congratulations. You made a wise career choice that will always benefit you.

If you are still working, be sure you are covered by one of the FEHBP plans in the 5-years prior to retirement so you can continue lifetime coverage.

If you are dating via the internet, forget about listing where you went to school, or your athletic prowess. And don’t fib about your age or post a 14-year old picture of yourself in a bathing suit. Instead, play your ace in the hole: Let it be known that you are covered by the FEHBP. The world will beat a path to your door.

Nearly Useless Factoid

The Pentagon has no marble because it was built during World War II, and Italy, the source of marble, was an enemy country.

To reach me: mcausey@federalnewsradio.com

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