When (if) you make it to retirement, a little advance planning now could be worth its weight in gold on D (for departure) Day.

Doing the right thing now, regardless of your age or time in government, could mean your full annuity will start sooner, you’ll get the maximum benefit due to you, and you will sail into retirement with the best health plan options in the business.

Or you can do nothing, trust that the HR gods will do the right thing throughout your career, and maybe wind up with a smaller delayed annuity as your reward.

Benefits expert Tammy Flanagan recommends that people start planning for retirement as soon as they start work — like Day 2. Since few people do, the next best thing is to attend any pre-retirement seminars your agency offers, and to definitely get your act together at least five years before you pull the plug.

Why five years? One of the primary reasons is your health insurance coverage in retirement. Some feds don’t participate in the FEHBP program. They piggyback on their private sector spouse’s plan which may be better, or cost less, or out of habit.  But when they retire things change. Many private firms don’t offer (or drastically reduce benefits) coverage to retirees. That’s when feds learn to appreciate the many options available under the FEHBP program, not to mention the fact that Uncle Sam pays the majority of the premium (between 72 and 75 percent) no matter how much premiums increase. The number of choices and the wide range of premiums is huge.

But you can’t remain outside the FEHBP while working and then move into one of the plans just before you retire and keep it. In most cases there is the five-year rule. It says that in order to have coverage under the federal program the employee must have been covered by one of its plans (any plan will do) for the last five years prior to retirement. Some feds learn about the rule too late. Their options are to take their chances with health insurance or to work another three, four or five years to satisfy the rule requirement.

Health insurance is just part of retirement planning. What if you had a break in service, took your money out of  the CSRS fund, then returned to government? What if you worked at half a dozen agencies?  How do you make sure you get full credit and maximize your service time and your annuity?

Today at 10 a.m. EDT on our Your Turn radio show, Tammy Flanagan will talk about what you should be doing now, to guarantee the best deal in retirement. You can listen live on 1500 AM in the D.C. area or on your computer. The show will also be archived later today on our home page so you can listen anytime.

Nearly Useless Factoid

by Meredith Somers

The official animal of Scotland is the unicorn.

Source: The Scotsman

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