Reg Jones Expert's View

I’ve pitched a lot of “what ifs?’ at you over the past weeks. They were divided between what changes can be made 1) during a window that opens between the time you decide to retire and the short period after you receive your first full annuity payment and 2) after the window closes. This time I want to finish the series with the ultimate “what if?” What if you die? Well, it all depends.

If you have designated beneficiaries, they will receive the benefits they are entitled to under the law. For example if you have a surviving spouse for whom you’ve elected a survivor benefit, the spouse will begin receiving that benefit. If you were enrolled in the Federal Employees Health Benefits program and you elected the self and family option, those folks will continue to be covered as long as one of them is receiving a survivor annuity. If you had Federal Employees’ Group Life Insurance, the proceeds will go to those you designated. The same is true of your Thrift Savings Plan account, if you had one that is still open. Depending on your Social Security coverage, survivor benefits may also be payable, as will a one-time $255 death benefit.

If you haven’t designated any beneficiaries, whatever can be passed on will be distributed according to the standard order of precedence:

8 to your widow or widower; or, if none

8 to your child or children with the share of any deceased child being distributed among descendents of that child; or, if none

8 to your parents in equal shares or the entire amount to the surviving parent; or, if none

8 to the executor or administrator of your estate; or, if none

8 to your other next of kin as determined under the laws of the state where you lived.

Words to the wise: If you are satisfied to have your death benefits paid in the order listed above, you don’t have to file any designations of beneficiary. However, if you have filed designations of beneficiary, you’ll want to check to see if you feel the same way you did when you filled out the forms. There has been more than one case where a new, single employee has designated his parents to receive his life insurance and forgot to change it when he got married or when he had children.