Terry Gerton Hey, I want to start with a listener issue. We’ve talked a lot about managing your pensions and purchasing power, but we don’t often talk about it from the perspective of folks who might have retired at a lower grade. And so a lot of them are experiencing this loss of purchasing power as healthcare inflation outstrips COLA. Can you talk a little bit about some management techniques that you would recommend to help kind of balance that?

Tammy Flanagan Sure. Yeah, I know we kind of get jaded in the D.C. area because there are so many high-grade positions and it seems like the average federal employee is making well over $100,000 a year. But you go outside of the Beltway and that’s not necessarily the case, because I have met people in military installations who are working at GS7, GS5 level positions and they’re hard workers and they do end up working 20 or 30 years, but yet their pension, especially under FERS, you figure if your high-3 is $60,000 and you have 30 years of service, that’s only an $18,000 a year retirement. So when you have to start deducting health insurance and dental and vision and pay for Medicare out of your Social Security, there’s not a whole lot left. And I think that was the gist of this listener’s comment. So I was looking at the health benefit premiums and I know a lot of employees, a lot of retirees have difficulty thinking ever of changing their health plan. But there’s a big difference between, let’s say Blue Cross standard option, which for a self-only plan is now running $378 a month, versus one of the Aetna plans that work really well with Medicare, if this listener is at the Medicare age yet, and for example, Aetna Medicare Advantage plan is $115 a month. That’s less than one third of the cost of Blue Cross. And this plan will give that listener back $125 a month towards the cost of Part B, almost covering the cost. So there’s ways you can manage those lower retirement benefits, and hey, for that matter, higher retirement benefits. Why should anybody pay more than they have to for really good health insurance?

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Terry Gerton That’s really helpful advice and so for our listeners out there I hope they’ll take that to heart and I really appreciate you doing that research for us. Next question is something you and I have talked about, and it’s coming to fruition now and in the next couple of months, is an accelerated number of federal retirees. We talked about the online retirement application. How’s that going right now?

Tammy Flanagan Yeah, well, I’ve been hearing from people who have now filed their online retirement application. Some of them had contacted me earlier saying, oh, I already sent in my paper forms and now they’re telling me I’ve got to submit it again electronically, why is this? And they were griping. But then I heard back from a few of them saying, hey, this was actually smoother than I thought it would be. It seems like this is going to help avoid mistakes, which I think it will. And I think there’s some checks and balances there. So when you’re filling out the online application, it’s going to prompt you to go to each section that’s necessary for you to fill out. It’s going to tell you what attachments you need to put on that application, such as your marriage certificate, or possibly a divorce decree or military records. So I think all in all, it is going to save time on the front end of the process, meaning that the employee’s going to have a better experience submitting the application, the agency is going to also have those same checks and balances when they submit the whole package to OPM after that employee retires. So I truly think it will save some time in the front end, avoiding some of those common mistakes that we typically see, like forgetting to sign the application, or you didn’t check a certain box, or the agency not sending health benefits information, for instance, they just didn’t get it in time or whatever. So I think that will help. I don’t know how much it’s going to solve the problem of the actual processing for employees who have really complicated career histories or divorces, or they’re under something like Civil Service Offset or law enforcement or they have part-time service. So that problem is still going to be there. So some of those employees will still wait three months, if not longer in some cases, for their retirement to be processed. But those simple cases, those straightforward, clean cases as I like to call them, those should go quicker, I think people will be really pleased to see how quickly their retirement might be processed now.

Terry Gerton I’m speaking with Tammy Flanagan. She’s a principal at Retire Federal. Any helpful advice for folks who might have been out of government a while before they submit this package? You’re talking, I think, from a perspective of someone who’s just now leaving federal service and has their agency HR group to help them. What if it’s been a while and now they’re just submitting that package?

Tammy Flanagan Yeah, we are seeing not only people who have already left, but people who are in the process of taking the deferred resignation who are not necessarily going to be applying for retirement. These are the folks who might be eligible for a deferred retirement, or maybe they’re eligible for what we call the MRA +10, but they want to avoid the age reduction, so they’re going to postpone the application. In that situation, you’re kind of on your own. You’re going to fill out the old paper form, which you can fill out electronically, but you still have to print it on paper and mail it to OPM. You’re on your own with not getting that assistance from HR, which a lot of employees still do receive. So you’ve got to be really careful to read the instructions carefully. If you haven’t left federal service yet, those folks who are leaving the end of September, be sure to take as much documentation as you can, proof that you’ve had health benefits for five years, your beginning and ending dates of your federal career, any time your work schedule changed. You want to be able to have the evidence of that career, that health benefit coverage, so that when the time comes to apply and receive that benefit, you get what you’ve earned. And if you don’t, you have something to argue with because you have all the proof of it.

Terry Gerton Yep, I can only tell you from my case, because I applied for mine earlier this year after having been away from government for a while. I had my whole personnel file and I was able to find all the documents, but then it went super quick. It was easy online and OPM settled it, but I might’ve been ahead of the retirement wave. What are you seeing now in terms of volume? Is OPM able to keep up with the number of retirees they’re facing right now?

Tammy Flanagan Well, it’ll be interesting because in May and also at the end of June, there were huge numbers of retirements, like three times the number of that same month in 2024, so OPM is getting deluged right now with all of these applications coming in much earlier than they would have expected. And I think part of that had to do with the threats that were included in the Big, Beautiful Bill proposals that never came to fruition, but we were so scared that they were going to happen before July 4th. So a lot of people pulled the plug and said, I’m going to get out of here a little bit before September 30th so I can still have my high-3 and all the things that we do still have because none of those were in the bill that became law. So yeah, I think OPM is going to maybe slow down a little bit especially, like I said, on those more complicated cases because those are going to start to pile up. The easier ones, just like with anybody who has work on their desk, if you see something that you can get done pretty quickly, you’ll get that off your desk to kind of make your numbers look a little better. So I think the simple cases will still go through pretty quickly. But I think those complicated cases, you’ve got to be careful. I think it’s going to take longer. You’ve got to really look it over when you get your benefit to make sure you’re getting everything that you’ve earned throughout your career. So just really review everything carefully before you sign it or before you just accept it.

Terry Gerton That’s really important advice. And I want to take retirement kind of one step farther because as you go through the retirement process, you’re making some decisions about benefits for your survivors. What do survivors of federal retirees need to know in terms of making sure that they close out that case correctly?

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Tammy Flanagan I think it’s important for the retiree to leave behind instructions. I know no one wants to think about what happens after they’re gone, but to really help your family, whether it’s your spouse or your children or your sister, whoever it is that’s going to handle those affairs, let them know that there’s the Thrift Savings Plan balance. Let them know that there’s either a survivor benefit or maybe just your last retirement check. How do they get that? Because you’re not going to get your last check because it’s always paid the month after you die. So leave those instructions, leave OPM’s number. In fact, retirees — like you got this too, Terry, I’m sure that retirement booklet — and in the back of that booklet are all the numbers you need and all the websites that you’ll need to review. So even if that’s the only thing you leave behind, that’s going to help your surviving spouse claim the benefit with OPM, retrieve that money from the TSP account or understand how that works when there’s money left in the Thrift, and even to the point of applying for Social Security survivor benefits or widow’s benefits. So it’s important, I think, to have that conversation at some point. Find a peaceful, relaxing time to bring it up and sit down and just show them where this stuff is. I remember when my mom was getting older and she took me in the bedroom to that box that she had in the closet and told me what was in it and what I might need to do when the time comes and I’m so glad that she did.

Terry Gerton That is so important. So, as we think about cleaning out our basement so our children don’t have to do it, having those kinds of conversations is one thing that can happen at the same time.

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