Expert's View

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I recently got an email from a reader who wanted to know what would happen to a retiree’s annuity if he or she either marries or remarries and wants to elect a survivor benefit for the new spouse.

This is another situation involving federal retirement where the answer is “It depends.”

If you aren’t married when you retire, either because you never married or because you are divorced and there isn’t a court order requiring a former spouse survivor benefit, and you decide to elect a survivor annuity for your new spouse, two things happen.

First, your annuity will be reduced by the same amount it would have been had you made that election when you retired. The actual dollar amount of the reduction will depend on whether you elected a full or partial survivor annuity benefit. If you are a CSRS annuitant, you can elect any amount from $1 a year up to 55 percent of your annuity. If you are a FERS employee, your only choices are 50 percent or 25 percent.

In addition to the initial reduction, your annuity will be permanently reduced to pay for the deposit owed. That deposit equals the difference between your new annuity rate and the annuity paid for every single month since retirement, plus 6 percent interest, divided by an actuarial factor based on your age on the day your annuity is reduced.

The rules are different if you remarry a former spouse. If the divorce occurred before retirement and there wasn’t any court order requiring you to provide a survivor annuity, the rules would be the same as those described above.

On the other hand, if you were married at retirement, later divorced, and subsequently remarried that person, what you can do is limited.

·      If your spouse had agreed to receive no survivor annuity, then you can’t elect one when you remarry.

·      If you elected a partial annuity, then you can elect one that is no greater than the original amount.

·      If a full survivor annuity was originally elected, a full survivor annuity can be elected now.

In the latter two cases, the reduction in your annuity would be calculated as described above and would be proportional to the amount elected for the survivor annuity.

Note: If you marry or remarry, you have two years to decide whether to provide a survivor annuity for your new spouse. After that, no election if possible.

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