For many of us, the goals we set are not solely based on our own wants and needs. We also want to enjoy a long life with our spouse. They are part of the reason we work hard and plan for a secure retirement. But what happens if you pass away unexpectedly? How would your spouse be financially affected, and what happens to your federal employee retirement benefits?
There are no simple answers to these questions, of course. A lot of the answer depends upon the timing of events, and situations can get complicated according to benefit rules. The main thing you need to know is that your surviving spouse will be eligible to receive 50 percent of your pension, based on what you would have received if you were still living and retired. So, clearly the exact amount will vary.
Another source of income for a surviving spouse is your TSP, provided there are funds left in the account. The TSP can provide a substantial source of revenue for your spouse and, like any investment, you should plan your retirement with the TSP as a source of income for you and your spouse.
As for Social Security, your spouse will be able to draw spousal benefits when he or she reaches full retirement age. Of course, if his or her own benefit is greater than the spousal benefit, they will simply claim their own.
Those are the three forms of income upon which your surviving spouse could depend, in the event that something happens to you. Other options include life insurance, and any additional savings you have accumulated. Your life insurance payout will naturally be based upon the policy that you selected at the time of purchase. We do urge you to perform a needs analysis before doing so, to ensure that you’re providing an adequate benefit to your survivors. If you’ve been making regular contributions to your Thrift Savings Plan, those accumulated assets will pass to your named beneficiary (probably your spouse).
Planning for your spouse’s security, in the event that something happens to you, can be a difficult topic to confront. Estimating retirement benefits and Social Security payments can be a challenge, especially since these amounts can change over time. Discuss this issue with us at your next appointment, and we can help you do the math and decide if you need to establish additional protection for your spouse or any other dependents.
