Survivor Benefit Plan

Retired pay for life is one of the great retirement benefits a qualified Military member is entitled to. A percentage of it can also continue as a benefit to your spouse should you predecease him or her. One of the most important factors for a married service member as they consider retirement is whether they wish to provide an annuity to their spouse should they predecease their spouse. This is called the Survivor Benefit Plan (SBP).

If selected, it provides a monthly payment for the lifetime of the beneficiary. The amount is based on a percentage of the retiree’s base amount and there is a cost associated with it. Enrollment is not automatic and there are limitations as to who can be the beneficiary.

Eligible beneficiaries under the plan will receive a percentage of the retiree’s elected amount of coverage. The amount of coverage is selected at retirement.

For example: If the retiree selects 100% of their base pay (let’s say that equates to a base pay of $5000 monthly) the beneficiary would get 55% of the $5000 ($2750 per month). 55% is the maximum percentage you can select. You can select lower percentage with lower costs, but beware, once selected, it is not changeable.

Unlike some private life insurance policies, SBP coverage will not be cancelled or revoked due to any illness you may have or your age. Whether you retire at age 45 or 80, you or your spouse’s age or health will never be considered a liability and never impact the cost of the program. In addition, the receipt of survivor benefits will not be affected by Social Security benefits. Finally, the SBP annuity is protected against inflation, increasing each December with a Cost of Living Adjustment based on the Consumer Price Index.

For nearly all retirees, Survivor Benefit Plan premiums are automatically deducted from your gross pay prior to the deduction of federal income tax. This helps to decrease your total taxable income.

For additional information please visit the Survivor Benefit Program website.