Survivor Benefits: What Your Spouse Needs to Know About Your Federal Retirement Plan

Your federal employee survivor benefits provide financial support to your loved ones after your death. These are some of the most important (and often misunderstood) assistance you receive as a federal employee. 

It’s especially critical for your spouse to understand what these benefits are and how they work. By including your spouse in your benefits planning now, you’re protecting them from any surprises or misunderstandings that could occur after you’re gone.

In this article, we summarize a few things you and your spouse should know about your federal employee survivor benefits. Interested in learning more? Then be sure to check out our webinar “Understanding Your Survivor Benefits.” It’s free and filled with valuable tips you won’t want to miss.

FERS and CSRS Pension Survivor Benefits

The Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CSRS) offer different survivor benefit options. If you’re under CSRS, your surviving spouse could receive an annuity of any amount over $22 up to 55% of your unreduced yearly retirement benefit. FERS provides a survivor annuity of 25% or 50% of your pension.

Both CSRS and FERS offer a Thrift Savings Plan (TSP), a federal employee’s defined contribution plan similar to a 401(k). Your designated survivor can inherit the balance of your TSP. 

Other survivor benefits your spouse may be eligible for include: Federal Employee Health Benefits (FEHB), Federal Employee Group Life Insurance (FEGLI), and Basic Employee Death Benefit (BEDB). 

Social Security Survivor Benefits

Most CSRS Feds do not pay Social Security taxes on their federal earnings. Because of this, they do not receive Social Security payments or survivor benefits.

If you are covered under FERS, you are eligible for Social Security and survivor benefits. How much your spouse receives depends on various factors, such as your earnings record and your spouse’s age.

Check out our webinars for federal employees!

Eligibility Requirements for Spouses

Here are some of the requirements your spouse must meet to be eligible for Social Security survivor benefits:

• Age: A widow or widower can receive benefits starting at age 60. If they are disabled, the starting age is 50. However, there is no age requirement if the spouse is caring for the deceased worker’s child, who is disabled or under 16.
• Marriage Duration: The spouse must have been married to the deceased for at least nine months before their death. There are some exceptions, such as for accidental death or death that occurred in the line of duty.
• Remarriage: If a spouse remarries before age 60 (or age 50 if disabled), this generally disqualifies the spouse from receiving survivor benefits. Remarriage after age 60 (or age 50 if disabled) does not affect eligibility.

Benefit Options for FERS Survivor Benefits and CSRS Survivor Benefits

You’ll want to discuss with your spouse the pros and cons of these three survivor benefit options: full, reduced, and no survivor benefits. Here’s a brief breakdown of each.

Full Survivor Benefit

If you opt for a full survivor benefit, you’ll receive a smaller retirement annuity during your lifetime in exchange for a higher benefit to your survivor after you die. For example, under FERS, you’ll have a 10% reduction in your annuity, which provides your survivor with 50% of your gross annuity.

(For more examples of the cost of survivor benefits, see “Marriage, Divorce, and Survivor Benefits for FERS and CSRS.“)  

Reduced Survivor Benefit

In the case of a reduced survivor benefit, your annuity will be reduced by a smaller percentage. Under FERS, your reduction is 5%. This entitles your survivor to 25% of your gross annuity. This option allows you to receive a higher annuity during your lifetime while still providing some financial support to your survivor.

No Survivor Benefit

Under this scenario, you’ll receive the full amount of your retirement annuity without reduction during your retirement. Your survivor will not receive an annuity benefit. Your survivor will also not be eligible for FEHB when you die. 

However, your survivor may still be eligible for other benefits, including a lump sum payment or TSP inheritance.

Special Considerations

When deciding between these three survivor options, you’ll want to balance your financial needs during retirement with the potential future needs of your spouse. Take into consideration other income sources which can supplement your federal survivor benefits, such as Social Security, life insurance, and savings. 

Think about both your health and life expectancy along with that of your spouse. If your spouse is in good health and has a longer life expectancy, this may justify a higher survivor benefit.

Take This Easy Step to Protect Your Survivors

In this article, we’ve shown how your FERS or CSRS survivor benefits help provide your spouse with financial security. But at Serving Those Who Serve, we realize your situation is unique, and one article can’t address all your concerns and questions. 

That’s why we’re inviting you to a complimentary “Understanding Your Survivor Benefits” webinar. Our federal employee benefits expert Ed Zurndorfer covers a range of survivorship topics including: 

• Differences between the CSRS and FERS retirement systems’ benefits
• Cost of electing benefits
• What forms to fill out to ensure qualifying relatives receive benefits
• Child and non-spousal survivorship

Or, feel free to reach out to the team at Serving Those Who Serve at [email protected] with your questions.

Written by Thomas Lee CFP®. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Katelyn Murray and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers  and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **

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