Freedom Financial Solutions, Inc. (FFSI) assists
Military and Federal Employees to save money,
reduce taxes, and increase their net worth.

What is Pension Maximization?

The federal government has created a defined benefit (annuity) retirement program for all CSRS, CSRS offset and FERS employees. This benefit is based on years of service and the age you plan to retire from the federal government. It is also referred to as a basic benefit, basic annuity or pension. CSRS, CSRS offset and FERS contribute each pay period for this benefit and it is matched by the government.

Upon retirement, many federal employees may wish to share a percentage of this basic benefit with their spouse in the event of their (the federal employee’s) death during retirement. This is called a survivor benefit.

In the CSRS and CSRS offset, a little less than 10% of their basic annuity is given up in order to provide a 55% benefit for their spouse. In the case of a FERS employee, the full 10% of their basic benefit is given up in order to provide their spouse a 50% benefit of their basic annuity. This amount is paid by the federal employee on an annual basis.

A similar program called SBP exists for members of the military.

Are you aware that….

Without the surviving spouse benefit option, an early death would
cause the entire pension to be wasted?

If your spouse dies first, you lose your survivor benefit. All money
allocated to this benefit is lost?

If the retiree lives a short time, the surviving spouse faces a lifetime of
reduced benefits?

If both retiree and spouse live a full life and die within a relatively close
time of each other, little benefit is realized after years of taking a reduced pension income?

In either case, the children, estate or charity will never inherit any benefits?

The difference in cost between the single life benefit and the surviving spouse benefit can be used today to purchase a permanent life insurance policy that can accumulate cash values?

If the spouse precedes the federal employee in death, the retiree can surrender the policy for the cash values or leave the death benefit to another beneficiary of their choice. This is referred to as pension maximization.

Are you paying too much
for VGLI or FEGLI Option B?

For members who want to supplement their SGLI or FEGLI and find a less expensive alternative to FEGLI and VGLI after separation from service or retirement, we offer Individual and Group Term Life Insurance