Ask The Experts: Retirement

By Reg Jones

MRA retirement and pension, health insurance

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Q. I am 50, have 20 years under FERS and am thinking of retiring in six years when I reach my MRA of 56. If I do this, will I get health insurance coverage right away? Also, can I retire at 56 but delay retirement payments until 60 (or is it 62?) so I can avoid the 5 percent-per-year reduction in the payout? My main concern is keeping health insurance in place as soon as I retire at 56 — I can afford to delay the payout.

A. If you retire under the MRA+10 provision and were covered by FEHB for the five consecutive years before you retired, you can carry that coverage into retirement. The downside is that your annuity will be reduced by 5 percent for every year you are under age 62. If you retire and defer the receipt of your annuity to reduce or avoid the age penalty, you’ll receive one month of FEHB coverage at no cost to your self and be eligible to enroll in that FEHB plan, or another of your choice, and be covered for up to 18 months; however, you will have to pay the entire premium, plus 2 percent extra for administrative costs. When you finally begin receiving your annuity, you’ll be able to re-enroll in FEHB.

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