Survivor benefits are a critical part of any financial planning strategy, but what happens when traditional options aren’t the right fit? In episode 120 of The Federal Retirement Show, Val explores alternative solutions, from life insurance policies to trusts, and discuss how each can be tailored to provide peace of mind for families. Whether you’re planning for the unexpected or just looking to strengthen your financial safety net, this episode will help you better understand the options that go beyond the basics.
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1.31.25: Audio automatically transcribed by Sonix
1.31.25: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Speaker1:
Welcome back to the Federal Retirement Show. I am your host, Val Majeski with American Benefits Exchange. As always, really appreciate you taking the time out of your busy schedule to view our content. It is meant for you. The federal employee that is out there looking for accurate information when it comes to your benefits and retirement situation. So really, thank you for taking the time out of your schedule. Now, today's topic, as well as a lot of other topics, you've heard me talk and say, hey, I had a federal employee that I chatted with that you know, had this situation or we came across this or this was a real life question. And so today's episode comes directly from that. There there was a listener recently, and I really do appreciate, uh, hearing that, that folks are listening. Right. We see the data, we see what happens, we see who's who's tuning in. But when I meet you in person and I come across it, or you'll get an email, or we do a benefits review and, um, or I'm doing a webinar or a seminar and I hear people say, hey, I've been listening to your podcast. That's great to know because you never know who's listening. You never know who's tuning in. So when I actually interact with you all, it is so great to see that people are getting what we want them to get out of this content, which is, um, good, good information so they can make the best decisions so you can make the best decisions for you and your family.
Speaker1:
And I keep saying this over and over so you can prepare as best as possible for retirement. Take advantage of everything the government gives you now. You know, get rid of the things that you may not need. Just make yourself as efficient as possible. Set yourself up in the best position going forward so that you can ultimately get across that finish line. Retire how you want, when you want. Living the lifestyle that you want, when it's all said and done. But today's, uh, topic, and today's episode comes from a recent question that I got asked, and I was like, hey, I haven't done a, uh, an episode on this topic specifically in a little while, so I appreciate you bringing it to my attention that we need to dive deeper into this. But perhaps some of you out there are also dealing with this, and it comes across or it comes about survivor benefits and looking at the different alternatives that are out there. So this particular question, I'm going to read it pretty much verbatim, uh, which is how the question came in. Is it could you discuss the pros and cons of choosing the 50% option? Now this is a Fers employee. Fers employee. Can you discuss the pros and cons of choosing the 50% option versus the 25% option, specifically, choosing the 25% survivor Benefit Plan option plus adding an additional life insurance policy.
Speaker1:
Now, you may have viewed our previous content. You've seen some some episodes, maybe others out there talking about it, where, you know, the survivor benefit plan, in my opinion, is a bad piece of life insurance. And I'm going to get in that, uh, a little bit deeper into that here in just a second, but I will discuss the pros and cons of choosing either one of the options that the government gives you, and then specifically the pros and cons of choosing the 25% with an additional or an alternative life insurance plan on top of that. So here's what we've got. First of all, I want to get into if you're not familiar with. So this question may be catching you off guard because you're not familiar with the survivor benefits plan. What is it? Maybe you just got hired and retirement seems so far away, but what is this choice that you're going to make upon retirement? Maybe you're in the middle of your career and you don't know all the options. So I want to review the survivor benefits plan first before we go into those options. Or the question and discussing the pros and cons as well as the alternatives. So first of all, it's a it's a way to continue or allow your spouse to continue a portion of your pension in the event that you die first.
Speaker1:
Okay. So this is for the retiree. When you fill out your retirement paperwork, they're going to ask you which retirement survivor benefit option did you want to choose? And you essentially have three options if you're a Fers employee. Now if you're CSRs, I'm going to mention this that you have almost an unlimited amount of options. But when it comes to Fers employees, you have three options. You can leave the maximum to your spouse, you can leave a partial or you can leave nothing. It's important to note that in either system, CSRs or Fers, if you're going to leave anything other than the maximum to your spouse, they have to sign off on it. There's a spousal consent form that they have to sign. So for those of you trying to be sneaky out there, and I say this jokingly, but you're going to leave anything less than the maximum for your spouse or leave them nothing. You can't do it without them knowing about it. They have to sign off on it. A federal employee health benefits are attached to this decision. So what does this mean? If you want your spouse to be able to continue your health insurance in the In the event that you died first in retirement, then you need to at least elect a minimal survivor benefit. Simply put, if you do not choose a survivor benefit and you die first in retirement, then your health insurance will die with you while you're alive, no matter what you choose.
Speaker1:
You both will enjoy your health benefits, but with no survivor benefits chosen, no continuation of the health insurance for your spouse if you die first. It's essentially a permanent choice, and it is mostly for a spouse. I did a an episode on other than spouse folks, right? Folks that have insurable interest, they can get a survivor benefit. I'd highly recommend you go check out that episode. But when it comes to this benefit is mostly a spouse, and it is essentially a permanent choice, essentially a permanent choice. I'm going to get into that as we go. Okay, so there's two options that you have, right. You can choose no survivor benefits. What does that mean. You keep your full pension because there's a cost involved with this. Right. The government is not going to give to give your spouse something for nothing. Uh, there's no death benefit if you choose nothing. So there's no continuation and there's no continuation of the health insurance if you choose. Yes, I want a survivor benefit. Well, your pension will be reduced. You can keep the health benefits, and there is a death benefit that's given to your spouse. How does that death benefit work with the survivor benefits plan? It is a monthly taxable benefit that they will get for the rest of their life.
Speaker1:
Right. There's no guarantee on how much they're going to receive. But no matter which choice you select, whether it's a minimal benefit, a partial benefit or the maximum benefit, this is a monthly taxable benefit that they will get for the rest of their life. So how does the survivor benefit work out the best? Well, if you retire, you pass away right away and your spouse lives forever. You paid the minimal amount into the plan. They get the maximum benefit. That's not how I want this to work. That's not how you want this to work. But that's the way I think it works out best from a financial standpoint. So CSRS employees, I'll go really quickly through that because the question really pertained to Fers. But just to give you an idea. Csrs employees, I said, you have almost an infinite number of ways that you can leave a survivor benefit to your spouse because it's very flexible. You can leave your spouse up to 55% or 55% of whatever benefit base you choose. Now, your benefit base is anywhere between your full pension amount and $22. Now, why is that? Because the the least that you can leave your spouse is $1 a month. So 55% of $22 is 12, which is you can leave your spouse a minimal benefit of $1 per month. Now with that, they can still keep the health insurance and retirement. They would still have to pay for the health premiums, but that is the minimum.
Speaker1:
The maximum you can leave is 55% of your full pension. The cost for this is approximately 10% of the benefit base. That's a little less than 10% of the base that you choose. Okay. Fers employees. Now. Fers. This is a simpler process, right? Csrs it's a little customizable. It's 55% of whatever benefit base. And it's a sliding scale in their Fers employees. It's cut and dry. You can either leave 50% or 25%. If you want to leave something, you can leave 50% or 25%. The 50% option is going to reduce your pension, though, by 10%. The 25% option is going to reduce your pension by 5%. Now let me get get into this. I said before a couple slides ago. It's essentially a permanent choice. Let's say you just said, yeah, I want to leave my spouse 50%. Let's do it. And several years down the road, you and your spouse are sitting there going, you know what? We really don't need this survivor benefit anymore. And we can really use that 10% back into the paycheck, into the pension. Let's get rid of the survivor benefit. We don't need it anymore. Unfortunately, you cannot do that. You cannot just say willy nilly, hey, I just want to get rid of this now, and I want to regain that 10% back in my pension. It's essentially a permanent choice.
Speaker1:
So you want to make sure that you are choosing the right option upon retirement so that you're not handcuffed. If it wasn't really the one that you wanted to choose. If in practice, it's not the right one for you. So you want to review all the options, talk to your spouse because they are the ones that are getting this benefit. Okay. Let's look at an example. So in let's say a person had retired, their high three was 100,000. They worked 30 years for the government. Uh, they were they were retiring at age 65. They were getting the, the 1.1 in their pension. So 100,000 high three, 30 years of service. Uh, it was after the age of 62, their pension calculated to be $33,000 per year, 33,000 if they wanted to leave the maximum 50%. The spouse, in the event that the retiree dies would get half right, 50% or 16,500 a year for the rest of their life. But it would cost 10%, 3300 a year or $275 per month. That's not going to be given to you. It's not going to show up as a deduction in your retirement paycheck. It's just going to have a reduced pension amount, right? Your reduced pension amount is now less by $3,300 per year to start. Now remember this is a a 10% 10% of your pension. So as you get cost of living increases, things like that, that cost can actually go up.
Speaker1:
We'll talk about that here in a second okay. So that's the example. And I want to just review real quick the survivor benefit plan. Right. You pay a premium. It's 5% or 10% for Fers employees and your pension is reduced by that amount. So it's essentially like paying a premium. It's a life insurance benefit. Why? Because a death benefit gets paid. If you die, a benefit gets paid. There's no cash value buildup. That money that you put aside in this example, 275 a month does not go anywhere and build somewhere, and it's there for you to use in case something happens. That's not the case. It's just poof it's not there anymore. There are lack of options in retirement and death. Let's talk about retirement. I mentioned it's essentially a permanent choice, so your lack of options mean you can't just willy nilly make changes as you want? If you didn't choose a survivor benefit, you just can't add it for no reason. And if you did choose one, you just can't reduce it or eliminate it for no reason. You can add it in retirement. If there's a life changing event, like you got married in retirement and you weren't married when you retired, then that's a life changing event. You can add the survivor benefit, and the other one is if your spouse predeceases you, you can get rid of it. You can eliminate the survivor benefit, regain your full pension, but you do not get any of the money that you set aside or that your pension was reduced by while your your spouse was still alive.
Speaker1:
So you don't get any of that money back in death. In death, there are no options for your spouse. So how does a life insurance or a death benefit really work? If you were to pass away, what is your spouse generally get? It's going to be a lump sum, tax free death benefit. How does the survivor benefit work? It is a taxable monthly benefit. Now granted, that benefit will last for the rest of their life, but there's no guarantee of how long they're going to live and that they're even going to recoup all the money that you lost out of your paycheck while you were alive. Because if the goal is to live long into retirement, let's say you live 20 years in retirement. How long would your spouse have to live past you to regain all that money that you set aside? Good news is, if you do, at least check the box for the minimal survivor benefit, they can keep the health insurance. You still have to keep paying the premium for that, so they'll have their premium deducted from their survivor benefit, but you get to keep it. I think it's a bad piece of life insurance for a lot of different reasons, because it's not as flexible.
Speaker1:
There's not as many options while you are living in retirement. There's not many options in death. It's taxable versus tax free in a real life insurance plan. So we're going to go over a couple different ways. And we will compare the two. And then we'll talk about answering the question. So pros and cons of of the 50% versus 25% as well as the 25 adding an extra life insurance policy we'll talk about here in a second. But let's review the survivor benefit plan and look at this comparison. So you can see this chart here. I've I've shown this in a lot of different seminars that are given I believe I've shown it in a different episode, but it it is a way to compare the survivor benefit plan versus an actual private life insurance plan. And I'm trying to do my best to compare kind of apples to apples here, right? Maybe it's not even apples to apples, it's really apples to oranges. But you can see and this is in my opinion, green is good, red is bad. And we'll go through this. And so you can see it. But survivor benefit plan okay. We're going to go through these different topics. So you can see what I'm talking about here. Um contractual agreement first topic the survivor benefit plan. Now granted. Yeah benefits can change at any time. You've seen that over the years. So Congress can change the way that this plan works at any point anytime that they That they want.
Speaker1:
Um, just understand that, you know, chances of them changing it are slim, but it can be changed. If you do have a private plan, you're under a contractual agreement between you and the actual life insurance policy, the actual life insurance company, the carrier managing costs. So the survivor benefit plan, the program can be very expensive. We said 10% of your check and cost increases as pay increases. So as you get cost of living adjustments as you go through retirement, right, your pension increases, you're seeing a reduction of 10%. So that 10% will increase. That's not locked in. When you're in a contractual private life insurance plan, the cost is locked in, it is managed, it is set. It will not increase over time. Okay. Cost savings. There are no good health discounts with the survivor benefit plan. What does that mean? Well, with actual life insurance you have to be healthy enough to get it so that if you are healthier or the healthiest, your cost will be less Then maybe somebody else, because you're in great health, so you have better than average health or excellent health. You can see a reduction in cost, and now it's tailored towards you and your specific situation and not towards the group like the survivor benefit plan beneficiaries. Who's going to receive the benefit? It is basically with the survivor benefit plan, a spouse only benefit.
Speaker1:
The cool thing with a private plan is you can name your spouse, yes, but you can name anybody else you want. You can have primary and contingent beneficiaries. You can alter those beneficiaries throughout the life of the plan. You can make modifications and changes to that. These are some of the options and flexibility you have with a private life insurance plan. And then family protection. Yes, the survivor benefit plan does provide family protection. It does provide a benefit, a death benefit to the spouse. Same here. Um, the private plan. You can customize what the benefits are going to be though. The only the only thing we'll get into this in the next slide is that family protection amount. The maximum is 50%. It may not be enough, but I'll talk about that a little bit more here on the next slide. Okay. Taxation. First of all, the survivor benefit plan. It's taxable a private life insurance plan. How does that work? It is a tax free benefit. Uh, proof of insurability, meaning you have to be healthy to get it, yet you don't need to qualify for that if you have the survivor benefit plan. So generally speaking, if you are not in great health or you're not eligible to get a private life insurance plan due to health conditions or your preexisting conditions or whatever, it might be, your health history, then the survivor benefit plan, I would still recommend it for you.
Speaker1:
If you want to leave your spouse something because you cannot qualify outside. So there are ways in which, just because I think it's a bad piece of life insurance, I may still suggest it to you for a couple of reasons. One of which would be, um, if you're not healthy enough to get private life insurance. And again, I just want to say what I'm telling you here. This is my opinion. This is based on my experience and working with federal employees. This is what I feel and think about the survivor benefit plan. It is by no means an end all be all a blanket, yes or no. For the survivor benefit plan, everybody's situation is different. So you have to consult an expert. Make sure that you're making the right choice. But you want to know all the variables and all the options, because the government doesn't say you can choose the survivor benefit plan, no benefit plan. Or would you like to look at private life insurance? They don't talk about that. So you need to know all your options. Okay. So the only negative to the private plan yes you need to qualify health wise. And if you're not healthy enough then we're still going to. We might still recommend the survivor benefit plan depending on the situation reducing coverage. Now here's the thing. Um, the decision is basically irreversible.
Speaker1:
It's pretty much set in stone. You cannot change it as you go. Like you said, you can't go from the 50% to the 25% option in the middle of retirement. You can't increase it. You can't make changes or modifications. The private plan, you can make changes. It's pliable. Right? You can you can move around. You can do some things to it. It's customizable. It's malleable. It's editable. All right. It's a way that you can you own and control this plan. So there are ways you can make changes while you have it. There's a lot of different changes you can make. Coverage limits. So this is where I said the family planning this goes to family needs on the bottom here too. So I'm going to tackle these last two. But coverage limits. What does the survivor benefit plan. Maximum for the Fers employees it's 50%. So the government is saying one person can live on half as much as two. The most that your spouse can get in the event that you die is 50% of your pension. What if they need more than that? What if they need 7,580% of your pension amount going forward? You can't get that from the government survivor benefit plan because it's limited. The max you can get is 50%. So what if you needed more? The good news is this is a customizable plan using private life insurance. You can customize the amount that you need.
Speaker1:
Make sure that the right amount of protection is there for your spouse so they don't have to live a lesser lifestyle or go live in, you know something, sell the house and sell some other things just to get by in the event that you die. First, you want to make sure that the proper amount is there. And this is where again, it's customizable. Using private life insurance, you can make sure that you're getting the right amount for your spouse. This is where you have to talk to your spouse. Hey, if something happened to you, the federal employee, how much would you need? In the event that I died first in retirement, I can get you 50% with my pension. But what if you needed more than that, right? How can we make this more cost effective? How can we maximize our benefits? That's what we're trying to do. Make ourselves more effective, more efficient. So what are the solutions right now I'm going to go to the the part where we talk about the question, can you talk about the pros and cons of the 50% versus the 25%? I want to talk about that one first, because the 50%, yes, you're going to maximize the benefit that you can get for your spouse directly from the from the government. And how does that work? You're going to select that in your retirement paperwork. Um, this is the 50%.
Speaker1:
So there's no consent form that needs to be done. That's the automatic actually the default option if you are married at the time of retirement and upon your death. Well, I'll say this while you're alive, your pension will be reduced by 10%. And upon your death, if you died first, your spouse will continue your pension at 50%. It will be taxable. They will set the pay for the health insurance, but they will get a benefit for the rest of their life and keep the health insurance the 25%. It's a lesser amount that your spouse is going to get. It's a lesser cost. That's 5% versus ten. And in the event you pass away first, they'll get 25% of your pension for the rest of their life. It is still taxable, but they can keep the health insurance. All right. So the 25% still allows the spouse to keep the health insurance. They still have to pay for the health insurance premiums, but it allows for it. So the plus and minuses of both the pros and cons you get more benefit with the 50%. There's more cost. You get less benefit, less cost, both. In both cases, you can still keep the health insurance pretty good there. You know, if you need that, because I do talk to a lot of federal employees, a lot of federal employees spouses are on the retirees or the employees health insurance, and they want to make sure that the spouse can keep the health insurance if they predecease them.
Speaker1:
You don't want to leave that to chance and say, well, they'll figure it out. They'll go on a Medicare plan. They'll go out there and talk to somebody else. Yeah. The coverage I've seen that a federal employee gets is pretty good compared to what's out there in the public sector. I have seen what you guys have as coverage. It is pretty good. I wish I could get it, I can't I'm not a federal employee, but just understand that if you want to keep that going, you have to choose that that minimal amount. So then there's the alternative. What if we combine it? What if you said, yes, I need the health insurance. And this is where I'd recommend this part. If a federal retiree wants to 100% make sure that their spouse can keep the health insurance if they died first, then you need to at least elect the minimal option, the 25%. Then we talk about, all right, if 25% is not going to be enough because it won't in most cases, the surviving spouse wants more than 25%. We say, okay, how much extra do you need? What dollar amount or percentage of the retirement income do you need in the event that the retiree dies first? This is a conversation with the spouse, and we can customize the plan and supplement the remaining need with a private life insurance policy.
Speaker1:
Now, how do we do that? Well, there are plans that are specifically designed to mimic the government survivor benefit option, right? So what would happen is if the retiree in this example, we did the 25% plus the private life insurance plan. In this example, the retiree dies first. There's a claim filed with the survivor benefit plan with OPM. And there's a claim file with the with the private life insurance policy. Opm will pay them the 25% taxable for the rest of their life. And then with the private life insurance plan, the surviving spouse would have the option to choose one of two things. They can choose a tax free monthly benefit for the rest of their life. So it's very similar to the survivor benefit, except it's the agreed upon amount, the contractual amount tax free for the rest of their life. Or they can choose a lump sum payout. They have a flexibility and option to do so. Now why would they choose either? Well maybe they think, man, I'm still pretty young and I want to make sure that I've got enough lifetime income. So I'm going to choose the lifetime benefit, the tax free lifetime benefit, because I think I'm going to way outlive the lump sum benefit amount with the amount of money I get total. Or I might think, well, we live long in retirement. I don't have a whole lot left.
Speaker1:
I want to get all my money now, and I want to get the tax free lump sum from the private life insurance plan. So in this example, somebody would get the Lifetime benefit from the survivor benefit plan. Lifetime taxable benefit. They can keep the health insurance, and they can get either a lifetime benefit or a lump sum from the private life insurance policy. Hopefully combined, that is enough to sustain them and they get to keep the the health insurance. That's one option. And that's a pretty good option because a lot of federal employees, like I said, want to keep the health insurance. So we can't entirely avoid the survivor benefit plan because that's a must have. If you want to make sure that the spouse can keep the health insurance, you don't want to roll the dice and think, well, my spouse is going to die first. What happens if they don't and you die first? You don't want to leave them stranded with health insurance. Okay, so that's the first thing. Then what if you decided, you know what, I don't want any survivor benefit. I don't need to have the health insurance. Maybe your prior military. Maybe your spouse has really good health insurance, and you're on their health insurance in retirement. Or if you really need the survivor benefit to give the health insurance that the fhlbb to your spouse, because they're going to continue your Tricare for life.
Speaker1:
Then maybe you don't need the survivor benefit, but you still want to leave an income to your spouse. Well, it could be more cost effective if you're in good health to do 100% or 100% of the income they're going to get. I'm not meaning 100% of your retirement, but you figure out the amount that your spouse needs, customize a plan, and have 100% of that benefit coming from the life insurance and zero coming from the survivor benefit plan. That's another option if health insurance is not part of the equation. If it is part of the equation, I go back to that 25% option and we fill in the blanks with a private plan. If you're healthy enough to get it, we go back to the 50%. If you're not healthy at all, and we're probably not going to get outside life insurance. There's a couple other scenarios in there too. Everybody's different. So if you have questions about this, let's let's look at your personal situation. But which option is best for you. Again we got to dive deeper. And this is a conversation with your spouse too because this is a is a benefit for them. You don't want to decide for them. You want them to be involved in this process. Now, granted, I don't want you to pass away early in retirement. I want you to live long, but I want to make sure that if you did pass away first, your spouse is taken care of.
Speaker1:
Now let's look at some flexibility and some options here. I just want to compare with the survivor benefit plan versus private. Okay. So let's say in the example when you got both, you got both the 25% option and the private life insurance plan. Let's see how they both work. All right. You're in retirement. Let's say you're in. Once you retire, you choose the 25% option and you're going forward into retirement. And a few years down the road, something happens. Let's say I mentioned earlier, you just said you talked to your spouse. You guys hit the lottery, you got a windfall. Whatever. You no longer need a survivor benefit option. Income is not going to be a problem, whatever the reason is. Well, I mentioned you cannot cancel the survivor benefits with the government. Done. You can cancel or make changes to your private life insurance plan. Transplant, you can cancel it and there is some cash value that's built up in there, some equity that's built up. So your premiums did build up a little bit of a of cash. You can cancel, take the cash and walk away scot free with, with some of the money back that you put into. It may not be all the money back, but at least some of it. Okay, let's say you're going down the road and, um, you know, your spouse dies first.
Speaker1:
Well, how does it work in the survivor benefit plan? You can cancel it and get back your full pension, but you don't get back any the money you put into it. I just mentioned with the private life insurance plan, you can cancel the plan, surrender the plan and get back some of the money that's into it. Right. So you've got some more equity built up. Interesting there. Uh, what if your spouse dies first and you wanted to keep the life insurance plan? You can keep it going. Good news is you can change your beneficiary, right? You can change it to whoever you want. You can name kids, grandkids, whoever as your beneficiary. It's not a spouse only benefit or pretty much a spouse only benefit like the survivor option. So that's another one. Now we go again to the part about what if you die first, your spouse only has the option to get the monthly payments with the government. With the life insurance plan, you have the option or she will have the option. He will have the option to get a tax free monthly benefit or a tax free lump sum. Pretty awesome. So again, which one is better for you? That's going to depend on your situation I can't. There's no blanket statement to say yeah this is the way to go. It's going to be different for everybody. But it's worth looking into.
Speaker1:
Now when should you be considering this? When should you be setting this up? I say people that are nearing or entering retirement now, nearing or entering retirement is a relative term for, you know, folks, some would think nearing retirement within ten years, five years, two years, one year. I think if you're within ten years of retirement, it's worth having the conversation and worth doing this because at least looking into it, not only are you younger and chances of being healthier as well, but if you're younger, then your insurance rates are going to be a little bit little bit better, and that's going to be a lot simpler fashion for you. So just understand that the younger you are, the healthier you are, the more benefit the plan is going to be. And you might be able to kill multiple birds with one stone. We can go back and look at, uh, you know, your your option B, for example, you can look at the episodes where we talked about the rising cost of option B and looking at private life insurance to mitigate costs. We can do a combination of a number of things for you within this plan. So you're covering all of your bases, not just the survivor benefit side. So I think, uh, answering the question going back, hopefully you've got a good understanding, uh, thank you for our listener who submitted the question, by the way.
Speaker1:
I want more questions like that. And I said, we come across these scenarios pretty often where we're we're seeing something that's unique. Or I'm answering a question on the episode this was directly sent in. I want I want everybody to send in more questions as we go, because that means this information is pertinent for you. You're looking for these answers. I want to be able to provide that. You can also go back and view the rest of our content. We've got 120 episodes now that you can go and view and check out and, and, uh, you know, peruse, if you will. There's so many different things that we've discussed over the, the, the lifetime of this, uh, radio show podcast, the federal retirement show. There's got to be something in there that'll be pertinent for you and your situation and really hit the nail on the head with what you're looking for. But hopefully you got a lot of insight, a lot of information, a lot of guidance. When it comes to your survivor benefits election. Reach out to us at WW federal retirement.com. Fill out the form. Be happy to chat with you. Go over all of your options. Review your situation, see which one which direction is best for you. As always. And I said it earlier, I appreciate you taking the time to view our content and look forward to seeing you on a future episode.
Speaker2:
Revenue sharing and athlete employment status. The college sports business model will continue to change in 2025. I'm Jim Tarabukin for the retirement radio network powered by Amira Life. Last year, the House versus NCAA case settlement concluded regarding revenue sharing as outlined. Schools will now be able to pay their student athletes, but the NCAA has garnered more power to control the name, image and likeness marketplace. National college football writer Chris Hummer explains further.
Speaker3:
For football, I think you're going to see the most drastic changes. Athletes straight up are just going to get paid a lot more money. Schools are going to have to pay out essentially 20% of their television revenue to the student athletes every year.
Speaker2:
Following the ruling, each Division one school will now have a pool of money, a type of salary cap, and will be obligated to pay all of their student athletes. The cap will begin at around $20.5 million per school, and will rise to around 30 million over the next ten years. Additionally, players can now negotiate deals with schools, coaches, collectives and donors before they step foot on campus. In other words, pay for play. Forbes sports business analyst Kristi Dosh says that these players are entering uncharted territories.
Speaker4:
I think that athletes and their parents and agents, agents for those who are able to get agents, are going to have a whole new world here because I do not think schools are going to choose to implement revenue sharing at a flat fee. There's some issues with that when it comes to antitrust law. Tax professionals tell me there's some potential IRS issues. So I think it's going to be based on market value.
Speaker5:
With the incoming government.
Speaker2:
In 2025. Employment status for athletes has lost traction. But the Johnson versus NCAA case, which argues all D-1 athletes are employees, is still pending in federal court. Meanwhile, some are calling for athletes to hold more power at the negotiation table. A possible collective bargaining agreement could be on the horizon. All told, though, there's still a great deal to sort through over the next few years. But you could argue it's never been a better time to be a collegiate athlete in 2025. For the Retirement Radio network powered by Life, I'm Jim Nokia.
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