Q. I retired in 1997 with a survivor benefit for my wife. She passed away in 2007, and the survivor deduction stopped. I am going to remarry, and I know the first deduction will be the 10-plus percent so I can give my new wife health insurance, but how much of a payback will be deducted, and what percentage can I leave her? I am 71. My retirement is about $67,000.
I am figuring that I will have about a $12,000 deduction when I remarry. I am thinking of getting a separate health insurance policy for my new wife plus giving her a share of my estate when I die. She has children she lives with now, and they would welcome her back.
A. As you’ve already observed, if you elect a full annuity for your new spouse, there will be two reductions in your annuity: the standard one and a permanent actuarial reduction to pay the survivor annuity deposit. The deposit equals the difference between the new annuity rate and the annuity paid to you for each month since retirement, plus 6 percent. The only way to find out how much that would be is to fill out a Standard Form 2801 (CSRS) or 3107 (FERS) and send it to OPM, Retirement Operations Center, P.O. Box 45, Boyers, PA 16017. (You can download a copy at www.opm.gov/forms.) Once you have found out the amount of the deposit, you can decide whether to proceed.
If you do elect a survivor annuity for your new spouse, add her to your FEHB enrollment under the self and family option, and later die, she could continue that coverage and have the premiums deducted from her annuity.