When a FERS retiree dies, their pension stops, unless they elected a survivor benefit at retirement. That election is one of the most consequential checkboxes on your retirement application, and for most people it can’t easily be changed later.
FERS gives married retirees three choices: a full survivor benefit, a partial survivor benefit, or none. Each one trades a smaller pension for you today against income and health coverage for your spouse later. Here’s how the options work, what they cost, and the questions worth answering before you sign.
The three options and what they cost
Under FERS, a full survivor benefit pays your spouse 50% of your unreduced annual annuity, and a partial benefit pays 25%. The cost is a 10% reduction in your own annuity for the full benefit and 5% for the partial. Unlike CSRS, FERS doesn’t let you pick a custom amount in between.
Here’s what that looks like for a retiree with a $40,000 annual FERS annuity:
| Election | Your annual annuity | Annual cost to you | Your spouse’s annual benefit after your death |
|---|---|---|---|
| Full (50%) | $36,000 | $4,000 | $20,000 |
| Partial (25%) | $38,000 | $2,000 | $10,000 |
| None | $40,000 | $0 | $0, and no FEHB (see below) |
Two details are easy to miss. The survivor benefit is figured on your unreduced annuity, so your spouse receives 50% of $40,000, not 50% of $36,000. And if you’re married, choosing anything less than the full benefit requires your spouse’s written consent, signed in front of a notary.
Hypothetical example for illustration only; it does not represent any specific person’s benefits. Your actual figures come from OPM.
The health insurance connection
This is the part many people don’t learn until it’s too late. If you don’t elect a survivor benefit, your spouse can’t continue your FEHB coverage after your death. To keep it, your spouse must be receiving a monthly survivor annuity, and you must be enrolled in Self and Family coverage when you die.
The partial benefit is enough to keep FEHB in place. That’s why many retirees treat 25% as the minimum, even when other income would cover a surviving spouse’s living costs. The exception is a spouse who is a federal employee or retiree with FEHB in their own right.
Other rules worth knowing
These come from OPM’s survivor benefit guidance:
- Marriage length. Your spouse generally must have been married to you for at least 9 months to qualify. The exceptions are an accidental death or a child born of the marriage.
- Remarriage. A surviving spouse who remarries before age 55 loses the benefit, unless the marriage to you lasted at least 30 years. Remarriage after 55 doesn’t affect it.
- Inflation. Survivor annuities receive cost-of-living adjustments when Congress provides them.
- Second thoughts. You have 18 months after your annuity begins to increase the survivor benefit, but it costs more than electing it at retirement. Reducing or dropping it later generally isn’t an option.
- Marriage after retirement. If you marry after you retire, you have 2 years from the wedding to elect a survivor benefit for your new spouse. That election carries an additional permanent reduction, which continues even if the marriage later ends.
- Former spouses. A court order in a divorce can award a former spouse part or all of the survivor benefit, which can limit what a current spouse receives.
Questions to answer before you choose
There’s no single right election. OPM itself points retirees to a few factors, and in practice the decision usually comes down to these:
- What income would your spouse have without your pension? Consider their own pension, Social Security (including survivor benefits), TSP and IRA balances, and other savings.
- Is that income protected against inflation? A survivor annuity receives cost-of-living adjustments when Congress grants them. A fixed income source loses ground over a long retirement.
- Does your spouse need FEHB through you? If so, at least the partial benefit is usually essential, regardless of the income math.
- What are your ages and health? The longer your spouse is likely to outlive you, the more years the survivor benefit could pay.
- Would life insurance do the job instead? Some retirees compare the annuity reduction to the cost of a life insurance policy. Insurance requires qualifying medically and paying premiums, and it doesn’t keep FEHB in place. That’s why it’s usually considered alongside the partial benefit rather than in place of any survivor benefit.
The bottom line
The survivor benefit election is made once, usually under deadline pressure, and it shapes your spouse’s income and health coverage for what could be decades. It deserves the same attention as your retirement date or your TSP withdrawal plan.
If you’re within a few years of retiring, it’s worth running the numbers for your own situation before the paperwork arrives. As a CERTIFIED FINANCIAL PLANNER™ professional who works with federal employees, I help clients weigh this election alongside their FEHB, TSP, Social Security, and life insurance decisions. Schedule a complimentary consultation to talk it through.
Jeffrey Settle, CFP®, District Financial Planning
Sources
- U.S. Office of Personnel Management, Learn more about survivor benefits and retirement
- U.S. Office of Personnel Management, Electing a survivor annuity after a post-retirement marriage (FERS)
- FedWeek, The Value of a Survivor Annuity
- Defense Civilian Personnel Advisory Service, Survivor Benefits Election Summary
This material is for informational purposes only and is not intended as tax, legal, or individualized financial advice. Federal benefit rules can change; confirm the details of your own election with your agency’s HR office and OPM before you retire.