I’ve often been asked to identify the granddaddy of retirement planning mistakes you can make. That’s a real challenge. There are so many dumb things that you can do, like failing to get credit for certain kinds of service or forgetting that the windfall elimination provision applies to you. However, the worst one in my book would be to set your retire date at a point in time when you wouldn’t be eligible to carry your Federal Employee Health Benefits coverage into retirement. Health care costs have risen to such levels that anyone without such coverage is in dire straits – not just you but your entire family, if you have one.

Did you know that the federal government covers 100 percent of its retirees who meet a simple eligibility requirement, while only 13 percent of companies in the private sector do so? Yep. I read it in the Wall Street Journal. So, what is that eligibility requirement? You only need to be enrolled in the FEHB for the five years immediately preceding your retirement or from your first opportunity to enroll.

There are some important exceptions to this requirement. You may also qualify if you are covered by the military’s Tricare program or the Department of Veteran’s Affairs CHMPVA and are enrolled in the FEHB when you retire; likewise, if you accept an offer by your agency to retire early. If you don’t qualify for one of these exceptions, you can apply to OPM for an individual waiver. However, the likelihood of your getting one is slim.

If you don’t qualify to carry your FEHB coverage into retirement, you will have a 30-day period during which you can either sign up for an individual policy with your carrier or extend your coverage for up to 18 months under the temporary continuation of coverage provision of law. Regardless of the individual policy option you chose, your coverage would be less (often far less) and your premiums higher (usually much higher). Under TCC your coverage would be identical to what you had while employed, but you would be required to pay the full premium plus 2 percent to cover administrative expenses.

Yes, I’ve thought it over and I’m still convinced that the worst retirement planning mistake you can make is to ineligible to carry your health benefits into retirement. While you can usually get along with less income because of a mistake, being without health insurance can be injurious not only to your health but to your life, and the health and lives of those you love..