Military Retirement and The Survivor Benefit Plan

When you retire from military service after 20 or more years, you will need to make decisions about your future and the future of your family. Military retirement benefits end upon the death of the retiree unless the retiree enrolled in the Survivor Benefit Plan.

What is the Survivor Benefit Plan? 

At retirement, you have the option of enrolling in a plan that will provide an annuity income for your spouse and/or your minor children in the event of your death. The Survivor Benefit Plan (SBP) pays eligible beneficiaries a monthly income that is adjusted annually for inflation. You are required to pay premiums for the SBP, but there are several things that keep the premiums far lower than any annuity you can purchase from a private insurance carrier.

  • Your premiums are paid with pretax dollars. How is that helpful? When an item is paid with pretax dollars, it serves to lower your taxable income.
    • Example: Your gross monthly benefit is $1000. Your SBP premium is $100 per month. Your taxable income from retirement benefits will be $900 rather than the full $1000.
  • Another feature is that the federal government pays all the costs to administer the plan plus a percentage of the premiums.
  • Finally, the benefit is adjusted periodically for cost-of-living changes. That is not true with a conventional annuity.

The survivor annuity is determined by the “base amount” you choose. You can choose a base amount from $300 to full retired pay. The maximum amount a SBP beneficiary can receive is 55% of the base amount. If you use your full retirement pay as your base, it will be 55% of your full retirement pay.

For more information about the Survivor Benefit Plan, Click Here.

What do the Premiums Cost? 

The premiums to cover your spouse are 6.5% of the base amount you choose. If you choose the minimum base amount (threshold amount), the premium will be 2.5% of the first $725, plus 10% of the remaining base amount.

Who is Eligible to be a SBP Beneficiary? 

If married at the time you retire, you can choose to cover your spouse. If you marry at some time after you retire, you can enroll your new spouse in the SBP, but the two of you must be married at least one year prior to your death for the new spouse to be eligible for benefits. You can also cover your spouse and minor children. If your spouse dies before the children are grown, they will receive continuing benefits.

You can also cover a former spouse with a SBP.  If you have more than one former spouse, you must decide between them. You can cover only one former spouse.

Children are eligible for SBP coverage until they reach age 18 or, if a full time, unmarried student, age 22. Children who are mentally or physically disabled and unable to support themselves remain eligible for benefits so long as they are unmarried. If you have a disabled dependent, you can contribute your SBP payments to a Special Needs Trust. A Special Needs Trust is a Trust designed specifically for mentally or physically disabled people.

What Role Does Your Spouse Have in the SBP Decision? 

If you are married at the time you retire from the military, your spouse must consent to the survivor election you choose. If you elect no survivor benefit or something less than the maximum benefit, your spouse must complete a “Spouse’s Consent to Survivor Election.” This federal form must be signed, dated, and notarized. The consent is then submitted with the SF 2801-2.





This website has been prepared for general information purposes only. The information on this website is not legal advice. Legal advice is dependent upon the specific circumstances of each situation. Also, the law may vary from state-to-state or county-to-county, so that some information in this website may not be correct for your situation. Finally, the information contained on this website is not guaranteed to be up to date. Therefore, the information contained in this website cannot replace the advice of competent legal counsel licensed in your jurisdiction.

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