How to value fed health insurance benefit?

[Anonymous]

Yeah, if you hit MRA with at least 10 years of service, you can opt for postponed retirement, which means you wait until 60 or 62 to begin receiving your pension and FEHB benefits. This allows you to avoid the reduction in pension for claiming your benefit early.

If you leave the gov’t before you hit your MRA then you can opt for deferred retirement, which means you delay receiving your pension. But with deferred retirement you do not get FEHB.

I’m just trying to think through how much I’m giving up if I leave before my MRA, which means deferred rather than postponed retirement. Even with postponed retirement you will have a health insurance gap to fill, but you can get FEHB when you start receiving your pension.

[Anonymous]

If you want to leave before MRA, simply leave and come back at MRA, work a month and file official retirement paperwork. Will have unreduced pension and FEHB. This is my likely plan because at MRA my service years will be 36, but I don’t want to work all those years. So will get out at 30 years.

[Anonymous]

Anonymous wrote:Yeah, if you hit MRA with at least 10 years of service, you can opt for postponed retirement, which means you wait until 60 or 62 to begin receiving your pension and FEHB benefits. This allows you to avoid the reduction in pension for claiming your benefit early.

If you leave the gov’t before you hit your MRA then you can opt for deferred retirement, which means you delay receiving your pension. But with deferred retirement you do not get FEHB.

I’m just trying to think through how much I’m giving up if I leave before my MRA, which means deferred rather than postponed retirement. Even with postponed retirement you will have a health insurance gap to fill, but you can get FEHB when you start receiving your pension.

It starts to add up fast.

COBRA or ACA between leaving govt and 65 (assuming you are not leaving for another job at 57)

Value of FEHB coverage for a younger spouse if you have one (vs them having to pay for coverage to 65)

Costs of the Medicare elements functionally replaced by an FEHB plan (D and arguably B)

[Anonymous]

NP I’m 30 at 50. What am
I can walk out for 7 more years. At 57 do I have the 5% penalty?

[Anonymous]

NP
I’m 30 years in at 50. I can’t walk out for 7 more years. At 57 do I still have the 5% penalty?

[Anonymous]

Anonymous wrote:NP
I’m 30 years in at 50. I can’t walk out for 7 more years. At 57 do I still have the 5% penalty?

No. You can retire at MRA + 30 (i.e. age 57). Also, the penalty is 5% per year below age 62 so it is a 25% penalty for people without 30 years.

https://www.opm.gov/retirement-center/fers-information/eligibility/