Lump-sum death benefit


Q. My father was a federal employee for more than 40 years. When he died, he had the highest civil servant rank possible. My mom died 15 months ago, and my dad died in September at the age of 86 after being retired for 24 years. He was receiving monthly annuity payments of over $6,000 a month until he died. We just received paperwork about a possible lump sum that would be whatever was left in his annuity that was not paid out in monthly payments. What is the likelihood that there is a lump sum left? Typically, do federal employees have a residual lump sum after 24 years of being retired?

A. It’s not only possible, it’s likely. That’s because each of his annuity payments contained a small portion of the contributions he made to the retirement system, which were tax-free because he had already paid taxes on that money. That portion was determined by life expectancy tables published by the Internal Revenue Service. Therefore, his estate can expect to receive something, however small.


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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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