You’re working hard, stashing money in your Thrift Savings Plan for retirement, also knowing that Social Security and your pension will help to round out your future income. You might also enroll in a life insurance policy, such as the Federal Employees Group Life Insurance plan. You hope there will be no need for those benefits any time soon, but want to protect your loved ones just in case.
So, you might be wondering what would happen, if you passed away prematurely. How would your life insurance payout be handled? What about your retirement plan or any other benefits?
When you first become a federal employee, you were asked to fill out a number of forms. One of those would have been a beneficiary form, which allows you to name someone who will receive any available after-death benefits. These “benefits” might be a payout related to unused annual leave, for example. While you might have completed those forms ages ago, it is actually a good idea to review the information every few years. Situations can and do change, and you might wish to select a different beneficiary at some point.
Many people overlook this step, and occasionally we see some surprising “beneficiaries” after a death. Just picture your ex-spouse or a partner from 15-20 years ago receiving your death benefits!
So whom can you designate to receive benefits, in the event of your untimely death? You can choose anyone as beneficiary on your Federal Employees Group Life Insurance plan, and also for the payout of your Thrift Savings Account. However, the rules governing your survivor annuity are much more strict and in most cases, only a lawfully wedded spouse can receive these benefits.
These are issues to discuss carefully with your estate planning attorney, but since they also relate to your federal employee benefits, keep working closely with us as you plan your financial future.