Retirement payments after death


Q. My mother worked for the Department of the Army for 36 years. She retired at age 57 and died on March 22, 2007, at the age of 77.  On April 1 of that year, her retirement check was deposited into her bank account for approximately $1,500.00. This money was returned to the federal government by her bank due to legal requirements of the government. What happened to that money?  It seems to me that she was only retired for 20 years and she should have had at least 16 years left of retirement benefits. What happens to the remaining money she would have received if she had not died? Or is there no remaining money, because her lump-sum death benefit to her beneficiaries only came to approximately $24. Does the government keep the remaining retirement benefits, or was she just entitled to that money only until her death?

A. Each monthly annuity payment contains some of the government’s contributions, which are taxable, and some of the retiree’s retirement contributions, which aren’t taxable because they were taxed at the time she made them. The proportions of each are determined by life expectancy tables published by the Internal Revenue Service. When a retiree dies, no further annuity benefits may be paid, including those for the month in which the retiree dies. Any unexpended retirement contributions are rolled over into the survivor annuity of a spouse, if there is one, or returned to the retiree’s estate. It appears that there wasn’t a surviving spouse and that $24 was all that was left of your mother’s tax-free contributions.


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

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