The 10 Worst Mistakes
Federal Employees
and Retirees Make

The choices you make now will determine the success of your retirement.  Some of these choices are not easy.  The following 10 worst mistakes are easy to make.

1.  Waiving a survivor benefit for a spouse with an income or retirement plan.

In the event of your death, all your bills don’t die with you.  Joint expenses continue for your spouse.  Electing a survivor benefit allows your spouse to continue to live in the style to which he/she has become accustomed.

2.  Migrating before calculating.

Moving before you have examined all the pros and cons of relocating to a new location can be a big mistake.  Consider and thoroughly assess the cultural, financial, and emotional impact, as well as your proximity to family, and access to medical services.  Focus on the reality of, rather than the dreams of retirement.

3.  Forgetting to consider your significant other or your own interests.

Your partner may not be eligible to retire or may never retire from being a homemaker.  After 20-30 years, your partner may not want you around the house all day.  In addition, you may not be ready to relax and want to invest your energy elsewhere.  Plan your retirement.  Whether it’s volunteer work, projects, continuing education, or employment — everyone needs a reason to get up and get going every morning.

4.  Ignoring your change in insurance needs upon retirement.

The Federal Employees’ Group Life Insurance Programs (options A, B, and C) increase in monthly premiums by nearly 50 percent at ages 55 and 60.  Many retirees who maintain the same coverage they had as employees are overpaying.  Examine your needs to determine what purpose life insurance serves in your specific situation.  Consider Long Term Care Insurance before you retire, when the requirements are less restrictive.  If you were able to drop or reduce your life insurance, more premium money would be available for Long Term Care Insurance.

5.  Expecting to receive a full Social Security retirement.

The Windfall Elimination Provision (WEP) can reduce the earned social Security benefits of a federal worker with CSRS retirement credit (not FERS only), who retires after 1985 up to 60 percent.  Under the Government Pension Offset (GPO), spouses could lose all of their survivor Social Security benefits.  To prepare for this hit, educate yourself on these issues, adjust your retirement budget accordingly and work to repeal these laws.

6.  Neglecting to elect a survivor benefit when you retire.

Electing a survivor benefit for a spouse at retirement or upon marriage (remarriage) after retirement will entitle a surviving spouse to federal health benefits.  Recent retirees can (within 18 months) elect a survivor benefit.  However, post-retirement elections are very costly.  Survivor benefits for a post-retirement marriage must be elected within two years of the marriage.  The survivor can pay Federal Employees Health Benefits (FEHB) premiums directly if the survivor annuity does not cover the premium.

7.  Failing to have 5 years of FEHB coverage before retiring.

A federal employee covered by a spouse’s private sector health plan who opts not to enroll in FEHB while employed, or is not enrolled for five years, cannot enroll n FEHB as a retiree.  To preserve this valuable benefit, enroll in the least expensive self-only FEHB plan for at least five years before retiring in order to continue FEHB into retirement and maintain the opportunity to change to family coverage at Open Season.

8.  Losing your FEHB coverage for your spouse when he/she has a non-federal health plan.

If you elect a self-only FEHB enrollment, your spouse will not be able to retain that coverage in the event of your death.  As a federal retiree, you must not only elect a survivor benefit but also have a family enrollment in effect at the time of death.  To prevent this loss in coverage, enroll in a family plan during the next open Season.

9.  Choosing the wrong health care options for a two-person federally-employed family.

Choosing between two self-only or a family enrollment is an important decision with financial implications.  Each family has its own unique situation that will determine what type of enrollment is best.  In some cases, two federal retirees should opt for the family plan, while families with one federal employee still working can choose two self-only enrollments.  Find out how premium conversion will affect your decision, the exceptions to the rules, and what’s best for you, by joining NARFE today.

The biggest mistake current and retired federal employees make:

10.  Failing to join an organization that represents your interests.

NARFE has the knowledge and support you need to help guide you to a secure retirement future.  With over 85 years of experience on Capitol Hill in federal retirement matters, you need NARFE to represent you.  Our Retirement Benefits Service staff have 90 years of experience in retirement and insurance at the Office of Personnel Management.  NARFE’s monthly NARFE magazine provides members with the latest news on issues that affect their income and benefit security.  NARFE needs you to grass-roots lobby with your own congressional representatives.  NARFE needs your membership to be effective on Capitol Hill, where we fight for you.

NARFE Membership Provides:

Legislative representation — On the federal and state level, NARFE provides members assertive representation on retirement income health care, long-term care, COLAs, taxation and more.  NARFE is your representative on Capitol Hill.

NARFE magazine and Web site — NARFE’s informative monthly magazine and Web site are the primary news sources for information about federal retirement and health care issues.

NARFE Retirement Support — Our retirement Benefits Service Department, Service Center volunteers and Chapter Service officers throughout the country help federal employees, retirees, and their spouses and beneficiaries, in matters relating to CSRS and FERS retirement — Medicare, Social Security, the thrift Savings Plan, and health, life and long-term-care insurance.

Special Membership Discounts

Your membership entitles you to special rates on insurance programs, auto insurance, travel services and more!

NARFE, a non-profit association, has been working for you since 1921.

Join NARFE Today.

606 North Washington Street
Alexandria, Virginia 22314-1914
Call TOLL FREE: 1-800-627-3394
or visit NARFE Online at

This page was updated 23 September 2010.

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