Q: I have six years to go before my planned retirement, and I have two follow-up questions regarding clarification on postponed annuities. I read the explanation describing the differences between deferred and postponed annuities. First, I wanted to thank you, as I was headed down a path that would have been problematic for me. I need to be able to maintain my FEHB while waiting for my annuity to kick in and be able to maintain my FEHB while I am a federal annuitant. I am a FERS employee who will be retiring when I am eligible at age 56 with 20.3 years of service. If I read your information correctly, I will be able to pay for my FEHB via the temporary continuation provision of law, where I pay the entire premium plus 2 percent. Then when I turn 60 and begin collecting my annuity, I can re-enroll as long as I was enrolled in FEHB for the five continuous years before I retired. I also want to confirm that at age 60 I collect my full annuity with no penalties. If I decided to collect my annuity earlier than expected at age 58, I only have to pay the 10 percent (5 percent per year up to age 60. Is that correct?
A: Your understanding is correct. However, I need to point out that the temporary continuation of coverage provision will only allow you to maintain your health-benefits coverage for 18 months. Therefore, if you want to have seamless coverage from the date on which you retire until you begin receiving your annuity, you will either have to retire later than you planned or begin receiving your annuity earlier than you wanted to do.