Lump sum payments


Q: I plan to retire at 60 years old with FERS. If I take the lump sum, will my health insurance still be valid and will the agency still pay its portion? Please give all scenarios (even the bad ones).

A: I assume by “lump sum,” you mean accepting a  Voluntary Separation Incentives Payment. If I’m right about that, you are eligible to retire, and you have been continuously enrolled in the Federal Employees Health Benefits program for the five years before you retire, you will be able to continue that coverage in retirement. If you are an employee of the Postal Service, your premiums will be higher when you retire because you will no longer enjoy the subsidy negotiated by the postal unions. If you are not a Postal Service employee and, after retiring, are  employed by any other agency of government, your premiums will be the same as they were when you were employed.


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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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