Ep #25: Why Life Events Matter

 You can spend. You can save. What is the right thing to do? Federal benefits, great savings plans too. You can save your own way, with help from Micah and Tammy. You can save your own way. Save your own way.

Micah Shilanski: Welcome to the Plan Your Federal Retirement podcast. I’m your co-host Micah Shilanski, and with me as usual is the amazing Tammy Flannagan. Tammy, how are you, ma’am?

Tammy Flanagan: I’m doing good, Micah. How are you doing today?

Micah Shilanski: Just another day in paradise. Summer is coming to Alaska, so we look forward to it all year long. So it is a great place to be this time of year.

Tammy Flanagan: Yeah, it’s nice when you have seasons. And summer in Alaska, I have to agree, that’s so pretty with the flowers that come in. Here in Florida, we have summer all year round, but we do have some seasons. So we do look forward to different things blooming at different times of the year. But I have to admit, I was really shocked when I came to Alaska and saw how much there was growing. And I guess, because you have the sunshine almost 24 hours a day, that things can really get big quickly.

Micah Shilanski: Yeah, it’s amazing. A short growing season, but the bounty is just amazing that comes up in that again, this greenhouse setup that’s there, the virtually 24 hours of sunlight coming in, really does some amazing things.

Tammy Flanagan: Yep.

Micah Shilanski: Awesome.

Tammy Flanagan: Well, we’re going to talk about things growing today, aren’t we?

Micah Shilanski: We are, we’re going to talk about some important stuff today and it’s sometimes, as you know, as our listeners, it’s the little details that can really catch you up, right? It’s what we think we know that just ain’t so. And by getting you listening to these podcasts, getting more great information, is really going to help empower you to make great decisions about your retirement. And Tammy and I, we were chatting about some interesting things that we’ve seen personally, with one-on-one clients, that have come up and we wanted to share them with you. And its life events. And Tammy, I think it’d be really easy for our listeners to say, “Oh well, life events, doesn’t really matter. I’ll deal with it at that point in time.”

Micah Shilanski: But you brought up a really interesting point when we were pre-gaming this in saying that life events, the important part about talking about them in advance is really the aspect of when a life event happens, we’re not in a state of mind to make good decisions. In fact, I call it our decision-free period, right? If there’s a traumatic life event in our life, we should go into a decision free period where we’re not making any decisions because we’re not in a good cognitive state to do that. So if we haven’t pre-planned some of these things and pre-thought about them, it could really end up in a disaster.

Tammy Flanagan: Yeah, you’re right, Micah. And there’s so many little things that I think if you just know some of the basics ahead of time and when the life event occurs, then you can think back to say, “Oh yeah, I know there’s some things I need to look into.” So I think today, we really want to bring up some things that even though you might not be going through that life event right now, at least it’s going to put that little seed in your mind that’s going to grow. Here we go with the growth theme. Make you remember that, “Hey, I better look into this a little deeper,” because when I get married or when I go through a divorce, it’s not as easy or as clear cut as we might think.

Tammy Flanagan: So we want to make sure we think of all these different federal benefits that can be impacted by a change in our family, a change in where we live, and things like that. So life events can really affect almost every area of our federal benefits. Because we were making that list between retirement, insurance, taxes, all kinds of different things. So we want to kind of overview those today.

Micah Shilanski: So Tammy, let’s do that. Let’s jump in. Let’s go through first, if it’s okay, let’s define what a life event is. And I want to make a quick pivot and talk about why it matters and maybe share some of the stories that we’ve gone through because, let’s find out what it is then why it matters is a good motivating tool for us to say, “Yeah, in real life, these things can make a pretty big impact.”

Tammy Flanagan: Right? Yep, I agree. And we’ve got the typical life events, I rattle these off when I’m teaching. Marriage, death, divorce, birth of a child. We know that these are the big top events that happen in our life. And sometimes when we’re hired on as a federal employee, we could be single. We could still be living at home with mom and dad. And then all of a sudden, we get married or we start a family or we go through a divorce later in life, perhaps, or lose a family member through death, tragedies and things. So like you said, there’s a lot of stress involved with some of these events and we want to make sure we’re making clear cut decisions, that we know who to talk to, to get the information that we need, and not to overlook some of the things that can trip us up.

Micah Shilanski: Amen. And I like to add to that life events, disability as well. Now that may not be a triggering event, to go and trigger some changes that are done. However, that’s another big thing in your life that when that happens again, we need to have a plan, whether that’s while you’re working, God forbid, but if you become disabled, but you could replace the disability with long-term care, right? That’s a disability in the future. We just think about it in retirement as a longterm care need versus “disability”. But it’s the same concept, and now what needs to happen?

Tammy Flanagan: When I teach mid-career planning, like when I have a group of people who are still 10 years, 15 years out from retirement, I call that the what if list? What if I became disabled? What if I pass away? What if I leave the government before I’m eligible to retire? So, life can take all these different forks in the road, and we’ve got to know the pros and cons of each decision point. Because even when it comes to disability, you don’t necessarily have to retire on disability. You might have enough sick leave or there might be a leave bank, or you may have some options before you go the route of a permanent separation for disability, for instance. So yeah, there’s always choices. And I think it’s important to know that you have choices and to evaluate those before you make a decision.

Micah Shilanski: Yeah. Really, really important. And Tammy, let’s jump in real quick, pivot from this. Why does it matter? We were talking a little bit about some cases that we were reviewing in advance. So if someone doesn’t do things right away, or if they have a life event and they don’t address it, what are some of the negative effects that can happen?

Tammy Flanagan: Yeah. Some of these things can happen when you’re no longer here. For instance, do you want me to tell the one story that I was telling you about?

Micah Shilanski: Yeah, please.

Tammy Flanagan: It’s an interesting one and I’ve heard it more than once, so I know this is not an isolated event. Sometimes whenever things don’t go your way, you can appeal to the Merit Systems Protection Board. And so in this one case, the husband was CSRS, he had retired a few years back. And after retirement, the couple went through a divorce. So at the time he retired, he elected for his wife to get survivor benefits like most people do. But after the divorce, what they didn’t realize is that that election that he made when he retired became void, when the divorce was final. And they didn’t go through the proper procedure of setting up that divorce agreement to allow for her to continue to get those survivor benefits. So when she found out after his death that she wasn’t entitled, they went back to the attorney, they fixed the divorce decree, got it set up exactly the way it should be, but it’s too late. He’d already died. So that had to be done prior to his death.

Tammy Flanagan: So especially when somebody goes through a divorce and they’ve made decisions for retirement, go back and revisit every one of those decisions, because that divorce will affect your TSP. It’ll affect your retirement elections that you made, affect your health insurance and the ability for that former spouse to continue health benefits. So it’s going to make some major changes, not only in your life, but also for the life of that former spouse. You want to make sure that they’re protected to some extent. I mean, even if it’s not amicable, you don’t necessarily want to make their life completely miserable or destitute.

Micah Shilanski: Yeah. And this is the aspect of, sometimes we go out and we hire a professional and I’m going to pick on attorneys. But we go out and hire an attorney and says, “Oh well, they know the law.” Then you’re going to make this set up. They’re going to make it put together. Well, their job is to, they’re an order taker, right? You tell them what you want to do, then they’re going to follow the law the best way possible to make that happen. That’s their job.

Micah Shilanski: The problem Tammy, that I see, jump in here if you see it differently, is that sometimes we don’t really know what we want or we’re not asking for the correct thing, right? We come up with a presumption that says, “Hey, when I go through this, oh, I was already a survivor, therefore I’ll keep getting survivor benefits.” That’s our presumption. Maybe there was even alimony that was inside of the agreement that our spousal maintenance, that they were going to continue to pay spousal maintenance. But guess what? When you die, spousal maintenance stops. So there was some presumptions that were there.

Micah Shilanski: And this is where you can really get in trouble when you don’t have a full team of people set up to help you. No, this is not a plug for Tammy and I, so not trying to be of that aspect. But you need to bring in other people that understand finances, that understand your federal benefits, that understand these different components, because you have a lot of moving parts when something happens, whether it’s death, divorce, marriage, disability, right? Any of those things, there’s a lot of moving parts to your benefits and you need to bring in the right team to make sure you’re getting your benefits. And if not, you’re the only one that’s going to be hurt.

Tammy Flanagan: Yeah. I look at it like if you’re hiring someone to do work at your house, you’re not going to hire a plumber if your electricity doesn’t work, or you’re not going to hire a painter to fix the air conditioning. So there’s different professionals for different things. And I have this same problem. I had this same problem until I realized, even in the area of law, there’s different kinds of attorneys. I thought all attorneys did divorces. No, there’s people who specialize in family law and other attorneys specialize in estate planning and some do specialize in different corporate things. So make sure you’re hiring the person for the job and you want to take it even a step further to be sure that it’s someone who’s familiar with the differences in the federal system, that you have to have a court order acceptable for processing at OPM that requires specific language. When you want an equitable divorce, you want to make sure everybody’s treated fairly.

Tammy Flanagan: The attorney is not necessarily the person who’s going to make that decision because some of that is financial planning, some of that’s tax planning. And there are people, I know we talked about this because I have a friend who has a certificate in divorce financial planning. And I asked her, I said, “Why do you need that?” And she said, “Because sometimes you say, “Okay, I’ll give you half of my retirement,” without realizing how that’s going to affect a future marriage or how that’s going to affect your ability to retire comfortably.” I had one couple, one time, it was kind of a funny story, but not for them. They were both senior execs, high level federal employees. They were married for years and years, went through a divorce and they said in the divorce decree, “I’m going to leave you half of my retirement.” And then in his side of it, he’s going to leave her half of his retirement.

Tammy Flanagan: Well, she wanted to retire when she was 72. And she said, “If I retire, I have to give him half of my retirement,” and meanwhile, he had no intentions of retiring. He was 80 years old and wanted to die on the job. So she couldn’t afford to retire on just half of her retirement. She needed his half to make her whole. It’s like, what were they thinking at the time of that divorce? They obviously weren’t considering that they’re both not going to retire on the same day.

Micah Shilanski: But going into that aspect of it, no one thinks about that. Unfortunately, I’ve been in courtrooms and with judges and attorneys and all that, and that never gets brought up to light. And when you bring this up, saying, “Hey look, there’s a ten year age disparity, doing 50/50, doesn’t make financial sense, because you’re penalizing one person.” They’re like, “Oh right.” And they just kind of like, hey, I’ve never looked at it that way. Because it’s simple. Well, if I have two wholes and I take half out of each side and I give it to the other one, then we still have two wholes, right? Well theoretically, yes, but not in reality because of age differences, retirement differences, spending differences. There’s so many things that go on here that you really need to focus on.

Tammy Flanagan: Really need to sit back and, and almost make a chart or a pros and cons table because there’s things you just don’t think about realistically, when you play out that scenario. Are we both going to retire on the same day? Probably not. And why not just say you keep your retirement, I’ll keep mine and see you later, because they were both of almost equal value. So why split them? It just didn’t make sense.

Micah Shilanski: So let’s pivot on this a little bit, Tammy. So it’s not just the divorce aspect. It’s also the marriage aspect of things too, right? So when we get married, there’s some things we really need to think about. One of the things that we see commonly not taken care of, and this is again, of course, all categories, but beneficiary designations. And I know we preach on this a lot because I still see it. And Tammy, I know you still see it as well, about incorrect beneficiary designations. And just because you’re married, your spouse does not supersede everything in your will, in your beneficiary designations, et cetera, that means now they’re going to get it all.

Tammy Flanagan: That’s right. Yeah, and I think sometimes when we’re first hired, especially people who come into government right out of school, like I said, they could have been single. They might not have even remembered filling out that beneficiary form. Most people don’t know their separate beneficiaries for retirement, life insurance, TSP, and unpaid compensation. So you don’t even know you have four different beneficiary forms. So it really does pay to go back and review those. Three of them are in your personnel folder. So if you have access to your EOPF, you can review FEGLI for life insurance, FERS, and unpaid compensation, so you can go back and see who you designated.

Tammy Flanagan: Or if you want to just file a new one, a new designation of beneficiary will supersede the one that’s on file. With TSP, you can check tsp.gov and go into your account and find out who you’ve named. It used to be funny because when they’d send out, and I think they still do this, when they send out the annual TSP statements and it comes in the mail. So if your spouse opens your mail, on the back of that statement, it shows your designated beneficiary. And I’ve had a few cases where the former spouse’s name was on there, and then the spouse was like, what’s this all about?

Micah Shilanski: Tammy, it was kind of funny. I was meeting with a couple and I was going through, and it was kind of the same thing. When I looked at their statement, we had the TSP beneficiary is on there and it was great. Let’s just say it was Bob and Sue. And Bob was a federal employee and Sue was the spouse, and Ruth was the beneficiary. And so I was like, oh my gosh, at first it was that aspect of, am I calling her the wrong name this entire meeting? So I glance over the tax return. I’m like, no, her name is Sue. It’s a different last name than Sue’s. I was like, all right, well, this is going to be awkward, but I have to bring it up. So I spin the form around, I push it between the two of them, and I said, “Hey, just a quick question. Would you mind telling me who Ruth is, and why she’s the primary beneficiary of your retirement accounts?”

Micah Shilanski: He got red, she got pissed. We ended up calling TSP. It was a TSP error. They put someone else’s beneficiary on his account. And Tammy, to make it even better, it’s been this way for six years. That means they got a notification in the mail. They got a confirmation that the beneficiary was changed. They’ve got multiple statements in their accounts with some other lady’s name on it, and they never stopped to look at it. So this is one of those things, right. And we can say, great, if he died, what would have happened? And we could argue one side or the other, but I’ll tell you one thing that’ll happen for sure, Sue would have been devastated. What do you mean?

Tammy Flanagan: Yeah. She wasn’t named and they’d have to figure out who Ruth was and try to track her down.

Micah Shilanski: Right. But even if the money ended up going to Sue, let’s just say that happen, imagine what it would do for her emotionally. To say, what happened? My husband just died. He had this other woman in his life. I mean, all these other things that completely aren’t true because we did not take the time to look at our documents. This is another reason it’s just so, so important to pull the stuff out and make sure it’s accurate.

Tammy Flanagan: Yeah. But every time I teach a class, people ask me, “How do I review my personnel folder?” I thought everybody knew how to do that, but apparently they don’t. So if you don’t know how to review your electronic personnel folder, find out. Contact your HR office, they can walk you through it. Make copies of what’s in there, keep them in your safety deposit box at home or wherever you keep your important papers. Because these are things that sometimes you’re not going to be around to help your family sort out.

Tammy Flanagan: Along with that, put your passwords and your usernames in there too, because sometimes when there’s a death and you’re trying to get into the bank account, or you’re trying to get into something else that you don’t normally do, you’re locked out. It’s like you don’t exist. So think in terms of what if I wasn’t here, how would somebody figure out and unravel the story of my life and the benefits that I have that are payable to those family members? So, we don’t like to think about those things, but pre-planning, that type of thing is really, really important. Once it’s done, put it away, you can forget about it for a couple of years, but revisit it time to time to make sure nothing’s changed.

Micah Shilanski: So Tammy, one of the things I want to pivot from this just a little bit, right? One of the things I think has really happened, whenever we have a life event, I would say cashflow is the heartbeat of retirement, right? And cashflow is the heartbeat of our lives. If we have good cashflow coming in, we get to do things we want to do. So anytime we have a life event, marriage, death, divorce, disability, birth of a child, et cetera, it’s great to look at cashflow and say, take the TSP, right. Great, can I put more money in the TSP? Is it too much going in the TSP? What’s happening in cashflow in my life and my savings, et cetera, to make sure we’re planning for that future. But when you look at the TSP, that’s a great time. Check your beneficiaries, check your allocations, check your contributions. Because more often than not, we’ve just left it on autopilot for a long time. It might make sense to revisit that.

Tammy Flanagan: And also, if you’re marrying someone who also is a federal employee or a federal retiree, you might want to look at things like health insurance. Maybe it’s better for us to have two only plans. Maybe this is an opportunity for the retired spouse to go under the active employee’s health benefit plan. So sometimes these life events can present opportunities that you didn’t have before as when you were single. So that can be in the case of health benefits, that can be in the case of electing the type of retirement that you’re going to need. So there’s a lot there to consider. And like I said, it really does affect almost every aspect of your benefits, including finance, for sure, and taxes. Isn’t tax planning different for a married couple than it is for a single person?

Micah Shilanski: I was going to say absolutely, right. We casually say, well, these life events. But the reason they’re called life events and the reason there’s a special exception to changing so many of your benefits is because these are huge things in your lives. That’s the reason these things open up. So because something massive is happening in your life, this is when you need to step back, Tammy, and look at it. And again, taxes, right? You’re a hundred percent correct. Taxes is different from married versus single. So how is that going to affect you? Now, this isn’t advocating for married filing single or not getting married because of taxes, that is never part of the decision. But understand how it works.

Micah Shilanski: In married couples, unfortunately, we’ll find out that when one spouse passes, when they go to single, all of a sudden they might be paying more in taxes than they were paying before, more than Medicare premiums, right? Because now all of a sudden, it’s not precise, but everything got cut in half. But a lot of times, if you’ve done good planning, the spouse’s income doesn’t get cut in half because they still need the same. Now they’re making “twice as much income” because a single person versus married. So they have higher taxes, higher Medicare premiums, higher other things. How are we planning for those?

Tammy Flanagan: Yeah. It’s just things that it’s hard to plan ahead of time, but it’s good to know that there are some things we need to do ahead of time. Yeah, I think taxes are something that is, even if nothing changes in our life, it’s things that we don’t know how to prepare for when there’s a change in our career. When we go from working to retired, I think some people think retirement is a tax-free event. It certainly isn’t.

Micah Shilanski: Exactly. My mother’s great. She came to me when she was retiring and says, “You know what, Micah, I’ve paid taxes for my entire life. I think I’m paid up. I don’t think I should have to pay taxes anymore.” And I was like, “Mom, that’s a great idea. I don’t think it works that way.”

Tammy Flanagan: That’s right. You would think that’s the benefit of retirement. I don’t have to pay taxes, but no, it’s not like that. Unless you move to Florida or Alaska, then at least you don’t have to pay state income tax.

Micah Shilanski: That’s right. That’s right. We’ll narrow down a little bit. So real quick, I want to do some action items, Tammy, some other things that we need to be thinking about with taxes. One is survivor benefits. We chatted about this a little bit, but how do survivor benefits affect us any time that we’re going to apply, anytime a life event happens. And then Tammy, there’s an interesting case about how long someone must be married before survivor benefits can kick in, right?

Tammy Flanagan: That’s right. So there was another one of these cases that comes up. Some of these Merit Systems Protection Board cases are just interesting to read, but they’re so sad. There was another couple that got married, and the spouse passed away, but there is a nine month marriage requirement. So in order for that surviving spouse to get survivor benefits, the marriage had to last nine months. So they got married in February, the person died eight months and 24 days later, wasn’t quite nine months. And so the surviving spouse tried to appeal to OPM to allow her to receive benefits, and the answer was no. The law’s pretty clear about the nine months. So you have to be married nine months, unless the death is accidental, then it can be paid sooner. Which, I always wonder, what do they consider? I fell off the cruise ship balcony, was that accidental, or is that something else? So accidental death or the birth of the first child. So if there was a child born of that relationship and it was less than nine months that you died, then than the benefit’s payable.

Tammy Flanagan: So who knows these things? I mean, who even thinks about those things, but it’s something you want to look up. And OPM does do a pretty good job of listing life events on their websites. You can go to opm.gov and you can look under retirement and also under insurance to see, what if I get married? What if I go through a divorce? It will tell you a little bit about the process of things that you can change and different rules that apply to those different situations. So that would be one place to go when you’re looking at either retirement or insurance changes.

Micah Shilanski: Absolutely. And then another thing to be thinking about too, and I know we talked about it previously on podcasts, but it’s so important, is those beneficiary designations, right? Making sure whenever a life event happens, and that’s your TSP, your FERS or CSRS pension, your unpaid compensation, your life insurance, federal employee group life insurance, FEGLI. The IRAs, your investments, your bank accounts, your real property, your home, several states are opening up that you can put a beneficiary designation on your house.

Micah Shilanski: So it’s really cool, because before, real property had to go through probate and it was the only thing that had to, if you did proper planning, but now you can put beneficiary designations on real property in about three or four states. So those are opening up. So this is great, now we need to check these things. We need to make sure all of this is up to date.

Tammy Flanagan: Interesting. Well, one thing that I thought of when you were talking about all those beneficiary designations is life insurance. And again, going through a divorce. I had a neighbor that went through a divorce, her husband was federal. And so she found out that he had passed away and she remembered in the divorce decree, it said something about making sure that she remained the beneficiary of that life insurance. So when she inquired with OPM, guess what? He had canceled that life insurance, he dropped it. So one way to avoid that from happening is, under FEGLI, you can assign the life insurance and sometimes that’s done through a court order where in the case of a divorce, he could have assigned ownership to her. So then he couldn’t have canceled it. He couldn’t have dropped or changed the beneficiary. So there’s that process of assigning the benefit, which can sometimes accomplish the goal that she had thought had happened as a result of the divorce agreement. But that divorce decree doesn’t stop you from canceling your policy.

Micah Shilanski: Yeah. I mean, it’s that combination of things, right? Yes, you have this court order that says, “No, this is what it was supposed to be.” But then again, if there’s no money to fulfill the court order, then the court’s not going to magically make money up here. And so you got to have both things. And Tammy, on life insurance, I’m a really big fan of what I call cross ownership, which means if you’re buying a life insurance policy, if you have it, well the beneficiary, let’s say it’s a spousal in this case, should really own that policy. Because if I die, granted I have a life insurance under myself, but I’m not going to get any benefit of that. Who’s it to protect? It’s to protect my wife and kids.

Micah Shilanski: So really she should own that policy because then she gets the notifications. She can control if the premiums are being paid. She can see everything on that policy. Yes, it ensures my life, but it’s really for her benefit, which is why she should probably own that. And especially in a separation case, right, you really have to have that cross ownership, otherwise it’s very easy, even it’s not intentional, for a mistake to be made. Years later, something gets canceled, whatever, and now you don’t have that policy in place and you didn’t even know about it because you weren’t an owner and you didn’t have a right to it.

Tammy Flanagan: I’ve seen a similar problem whenever somebody decides they’re going to use life insurance instead of electing a survivor benefit.

Micah Shilanski: Ooh, yes.

Tammy Flanagan: So they say, “Oh, I got this million dollar policy. So if I die first, you’ll use that instead of getting the survivor benefit.” Well, there’s no spousal protection on a life insurance policy. So if you get to the point where you can’t afford to pay the premiums, or you don’t want to renew the policy, or you just get in a fight with your spouse and decide heck with you, I’m going to cancel that policy. The spouse has no right to make you keep it, there’s nothing they can do. Or if it’s unaffordable, you can cancel it. So I would never really recommend that as a good alternative to the survivor benefit. It just doesn’t make common sense. If things don’t make sense, they’re usually not the right decision.

Micah Shilanski: Amen. Go for the simplest thing because, it’s the best intentions. But the more we over-complicate something, especially over time, the less it’s going to happen. And Tammy, I’ve seen people lose life insurance policies because they changed bank accounts and they forgot that it was on auto-pay. They wanted to keep the policy, but they just forgot about it. And by the time they remembered it, the policy was now canceled. And so now they’re uninsurable or they’re dramatically older, and that premium is going to be up a lot compared to what it was. Versus a survivor benefit, OPM’s taking that money out before the check ever comes, so there’s no way not to pay that. I mean, that survivor benefit is a huge benefit.

Tammy Flanagan: I’ve seen that happen with long-term care insurance too, when somebody retires. Because when you first retire, there’s that interim processing period where your health benefits continues, your life insurance continues. There’s an agreement with OPM that allows that to happen. But when it comes to your dental and vision coverage and your long-term care insurance, there’s that period of time when you’re not employed and you’re not fully adjudicated into retirement, that you’re required to pay those premiums. You’ll get a bill. Well, I had a friend of mine one time who said, “Well, I don’t want to pay that bill.” I was like, why not? So she didn’t, and guess what? She lost her long-term care insurance. And try to go get back into it 15 years after you bought the policy, you’re not going to get the coverage or at least not at the same price.

Tammy Flanagan: It’s like, pay that bill when it comes, and make sure somebody is looking in your mailbox if you’re not going to be home. Or if you’re moving, make sure you notify everybody of where you’re going to be as of what date. One of the most important things you can do when you retire is to make sure when your address changes, let everybody know. Let OPM know, let social security know, let the TSP know, because there’s always things they mail you that you don’t want to miss out on, because they can be avoiding a penalty or avoiding missing out on some important opportunity or decision that you have to make.

Tammy Flanagan: I had somebody who didn’t get their survivor benefit and she didn’t even know that she wasn’t entitled to it because she said her husband was so cheap that he only left her a six month survivor benefit. And I said, “Well, there is no such thing as a six month survivor benefit.” But what had happened was she moved in with her son after she became widowed, never notified OPM of where she went. She changed banks, never told OPM where to send that money. OPM didn’t know where she was. And so when I told her, I said, “We need to call OPM, find out what happened.” And they said, “Well, we were hoping you’d call because we didn’t know where to send the money.” For six years, she wasn’t getting a benefit she was supposed to be getting. So she was very happy. I got a bouquet of flowers out of that one.

Micah Shilanski: It was a good phone call.

Tammy Flanagan: That’s right.

Micah Shilanski: So those are really important things, right? Keeping things up to date and don’t get caught up in that aspect of, well, going back to the insurance premiums, well, I shouldn’t have to pay this. This is going to come out of my retirement check later. I shouldn’t have to deal with, this OPM should. No, no, no. Whether you should or shouldn’t, is an irrelevant part of the conversation. The question is, do you want to keep the insurance or not? Do you want to keep coverage or not? We’ll argue about government processes over beer or over wine, right? This is the practical side of it that says, no, you need to do things to make sure you are taken care of. And then we can play catch up later once pension incomes and all start coming in.

Tammy Flanagan: Yeah, you don’t have to like it. You just have to know the rules and abide by them.

Micah Shilanski: All right, Tammy. Well, let’s transistion to a few action items, because this podcast is not only about great information for our listeners. And by the way, if you’ve enjoyed that, then jump on there, give us five star review. This podcast is growing because of our listeners, so thank you very much, with sharing it with your coworkers and friends and those five star ratings we really, really appreciate.

Micah Shilanski: But Tammy, let’s jump into a couple of action items so our listeners can take things and do them right away, and I can kick this off. I’m going to say the first one that you should do is write down who is on your team to make decisions when life goes sideways. When you have a life event take place, whether you’re here or not, who’s your team in place? And I’ve met with several clients that have said, “You know what, Micah? I just want to introduce you to my wife. I’m going to do my own planning. We’re going to do everything, but I wanted her to meet you or them to know you, so if anything happens to me, you are the first person they’re going to call.” Okay great, right? Who’s on their team? So even though we’re not working together, they know they can reach out. So who’s the financial person? Who’s the benefits person? Who’s the attorneys? Who’s the CPAs? That when life goes sideways, you know who you’re going to turn to.

Tammy Flanagan: Yeah. It’s so important. I would add to that, as I was saying before, keep that list of accounts, usernames, passwords. I know my husband and I, we have a spreadsheet that comes up on our computer. When we say, “Hey, what’s the account number for the credit card,” or whatever. So we know, we each keep that up to date. We have the name of the account, the numbers, and anything that identifies that. So if something happened to him, I’ve got a list of everything that we have as a family that we need to address. Who’s going to pay the mortgage or who’s going to pay the property taxes? So we make sure that we know how to get into those accounts because today everything’s electronic, we do everything online.

Micah Shilanski: And Tammy, with that, one of the things I encourage people to do is tax time, right? With taxes, you’re getting 1099s, you’re getting statements from all of these places. Even if it’s a retirement account, it might be great to throw that in your tax file, because now you have a list of at least all your financial assets that someone can go to. So you don’t need to spend time every single month compiling this, because we don’t make that many changes throughout the year. This could be a once a year, put it to tax time, throw those annual statements in there, update that password sheet, have it available. I think that’s a great idea.

Tammy Flanagan: Declutter, that closet, right? Get rid of some of those things that are not worth keeping anymore, so it’s easy to find the things that you do need. I’m a big fan of labeling everything and trying to keep things at least somewhat organized, especially when it comes to important paperwork.

Micah Shilanski: I like it. Well, perfect. Well those are your action items, really important to take action about your benefits. It’s not just enough to know them. You got to take action to get the most out of it. And until next time, happy planning.