Real Life Examples and Personal Experiences of Federal Employees

9.15.23: Audio automatically transcribed by Sonix

9.15.23: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Val Majewski:
Welcome back to the Federal Retirement Show. I'm your host, Val Majewski, with American Benefits Exchange. And today I'm changing it up a little bit. No, normally I've got a lot of content and showing you some PowerPoint slides and just something that is a little more, you know, formal on the educational side today. Want to tell you a few stories. There were two conversations I've had within the past week with federal employees similar to you in the situations that you have. They were very unique situations, very unique scenarios, very unique questions and circumstances. But maybe you can relate to it and maybe it'll bring up your own questions that you have. So I'm going to go into these two situations and described why they called, what they were looking for and how we were able to point them in the proper direction. Now, this first gentleman is a former federal employee, actually former enlisted military personnel as well. So they've had military time. They did not have enough time for military retirement. Got out of the military. Worked as a federal employee for a number of years. Did not retire. Left. Resigned. Picked up a job in the private sector. And that's why this person called me. Now, he was asking about his pension. What does he do from the government? What is he eligible to collect from the government and when? So we went over a number of of things and we went over. First of all, I was asking about his military time once. He told me he was prior military and I'd asked if he had purchased back his military time.

Val Majewski:
Now, if you go back to the episodes where I talked about the top ten mistakes that federal employees make, not purchasing back military time is one of them. I want you all to get as much value out of that time as you can. You served. Appreciate your service. Thank you for that. And I want you to get some value if you decide to become a civilian federal employee. If you don't if you're not eligible for retirement from the military, you can utilize that time and buy back that service and have it count towards your Fers retirement. Incredible service for that when calculating your pension and eligibility for retirement. So first of all, ask them about that. Now, he did not purchase back his military time, so I encouraged him. Look, look into that. See if that's something you're still eligible to do, if it makes sense. Because once you're beyond a a period of time, after you separate from service as a military person, there will start to accrue interest on the balance that you owe, the deposit that you owe in order to purchase back that military service time. So I told him it would be worth looking into to see if he can still purchase back that time, number one, how much that deposit will be, and then weigh the numbers to see if it makes sense to pay the deposit, plus any interest that has accrued.

Val Majewski:
Number two, I asked him if he left service and how he left service. He said he had resigned from his position as a federal employee. And in the end I came and said, Well, did you take out the money that you had put in? Did you take out your first deposit money, the money that came out of your check every pay period to go to the first system? Do you remember getting a check, a lump sum and taking all that out? And he had said no. So his deposit was still there. It was still with the first system. So he still gets credit for that time. Unfortunately, if he had taken out that deposit, then all of that service time that that he has no longer exists when it comes to eligibility for some sort of pension. But if you take out that deposit, it negates your ability to get a pension. You've taken out that deposit you made for your service time. So in this scenario, here's what could happen and hopefully will happen for this person. He's eligible, hopefully to still purchase back military time and find out what that deposit is and what he needs to make in order to get credit for that time. We'll see what that comes back with. To the if he does not do that, let's say he did not do it. He at least had five years of service as a Fers employee so he can file for what's known as deferred retirement. Now deferred retirement you can file for.

Val Majewski:
As long as you have five years of service and you left service and maybe any age, right? Let's say he resigned at age 50 and he had five years of service, He's not eligible for any sort of immediate pension, but he can file for deferred retirement and get a deferred pension. He wouldn't be able to collect on that until age 62, but he can get something for his five years of service. So in this scenario, there's a lot to sort out and hopefully it gets taken care of with this individual can get some credit for that military time utilizing also the first service time that he had filing for deferred retirement and getting that deferred pension and start collecting at about age 62. So if you're in that kind of situation, if you're like, hey, I've got some military time or I worked and left service and wasn't eligible for retirement, I just resigned or left or got a better job. And you still want to see if you're do something, if you're eligible for something when it comes to your pension, reach out to us. We'd be happy to dive into your situation. The same that we did this gentleman and see what we can sort out. See what the best direction going forward is. That was scenario number one. Question number two revolved around Fhlbb and Medicare. Now, there's a number of things that are going on out there now with with regard to health care and health care reform and changing up some of the deals.

Val Majewski:
I know there's an issue with those that work for the Postal Service and they're trying to make some changes as far as Postal Service health benefits. But let's look at in general, the Fhlbb, the federal employee health benefits and how that corresponds with Medicare. Now, typically, okay, if you have fhlbb while you're still working, obviously you fhlbb is going to be your primary, even if you're beyond age 65 and you're still working Fhlbb is your primary and at age 65 you'll automatically get part A of Medicare. While you're still working. You do not have to. You're not required to. Take part be. You can if you want. You certainly can. If you retire. But you are not required to take part B And while you're working again, FB is your primary. Medicare will be your secondary if you're beyond age 65. Once you retire, that flips Medicare, becomes your primary and FB is your secondary. You still at this point are not required 100% as a Fers employee to take part B you can if you want to, and you have to pay an extra premium for this, but you are not required to. Just understand if you don't take it right away upon retirement and you decide later down the road that you do want it, well, you'll be surcharged or a penalty charge will be assessed to your part B premium. So try to talk to somebody and see if taking part B at the time of retirement or if you retire prior to 65, whether taking part B at 65 makes the most sense for you because there is a cost for it.

Val Majewski:
And if you decide later there could be a penalty assessed. So that's generally how this works. But the question I got asked was from a spouse of a federal employee. Now the federal employee is actively working. Is 60 years old. The spouse is 65 and older. And on this employees health benefits. The question from the spouse was, do I need to take part B? My required at this point, am I going to be penalized down the road if I don't? And I want to take it later? So while the federal employee is still working, this is an active federal employee on FB. The spouse is on the Federal Police FB while the employee is still active. The spouse who's covered by FB will get Medicare at age 65. At least Part A and is not yet required to take Part B and will not be penalized for not doing so because the spouse is active and they're currently on that spouse's active. Fb. I don't want to confuse you. Okay. The federal employee actively working. They're both on the FB. 65 year old spouse. Even though they're not the federal employee is not required at this point to take part B. Now, let's say the spouse retires. This is what was going to happen. The spouse is going to retire prior to the age of 65. So the spouse is not yet going to get Medicare.

Val Majewski:
Sorry, the federal employee I kind of want to confuse here. The federal employee retires at age 60. Is not going to be required yet to take part B, because they're not Medicare eligible yet. The spouse of the federal retiree who was already over age 65 while the federal employee was working. Now we'll be required. Make that choice of whether or not they're going to choose Part B. Okay. They still don't have to take it. He'll be penalized if they decide not to and then take it down the road. So just to review, this was about, you know, the timing or the requirement or what was needed when it came to FB and Medicare. So a lot of it relied on the federal employee in this case was under age 65. The spouse of this federal employee was already over age 65 and retired. The spouse already had Medicare Part A. Because the federal employee was actively working, even though they were under age 65. Is actively working. The spouse, who is over 65, did not need to take part be. When the federal employee retires. And this was going to be under the age of 65 at age 60, when the federal employee retires at age 60, the spouse who's over age 65 will now have that option or be required to make a choice whether they want to choose Part B or not. They don't have to. But understand now at this point they will be penalized if they do not elect Part B and decide to get it later on down the road.

Val Majewski:
The other question was, does the spouse of the retiree have to take part in order to keep the. And the answer was no. So if you're in a similar situation or you have questions regarding your health insurance, even have questions about your life insurance and the continuation of that in retirement costs involved and the options and the coordination with Medicare for health insurance reach out to us. We'd be happy to help. And again, lay out your situation, your unique, unique scenario, and sort through it all, point you in the right direction, make sure you're set up properly. Well, as I said, today was a change of pace. Today was a little bit of story time storytelling and hopefully you got something out of it. Hopefully there's a question within you that you want to ask after seeing these unique scenarios. Reach out to us, go to federal retirement. Show.com fill out the form, request the full benefits review. Hey, as a result of getting a completed review done, we'll send you a copy of my book. There's no excuse your guide to maximizing your federal employee benefits just as a thank you, but reach out to us Federal retirement. Show.com fill out our form. We'll be in touch. We'll go over your situation and make sure we get all of your questions answered. Thank you again for viewing the federal retirement show and we look forward to seeing you on a future episode.

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