HEADQUARTERS DEPARTMENT OF THE ARMYRETIREMENT SERVICES OFFICE
Survivor Benefit Plan (SBP)
Mandatory Brief
30 April 2024
“BE ALL YOU CAN BE”

1Our Goal• Provide you with the facts so you can make an
informed decision• Correct misinformation2• Our goal in this briefing is to provide information to you on the Survivor
Benefit Plan, or SBP. Along the way, we expect to replace some common
misconceptions about the Plan with facts.
• We ask only that you unlock your assumptions and listen openly to thispresentation.
• Your decision regarding whether to participate in SBP affects your family’s
future, and so, rather than making the decision based on someone else’s
opinion, we encourage you to consider your situation.
• Use what you learn in this briefing to make an informed decision that suits
your family’s need. It’s a decision you will have to live with!

Purpose• Break SBP down into manageable understandable
blocks, to help you to make an informed decision on
your individual SBP election• Remember your current SBP decision impacts your
Family’s future financial wellbeing

3

SBP is a complicated program and this briefing is designed to break it down in
to explain it in detail so you understand SBP. We use charts to graphicallyshow concepts where possible. All of the material does not apply to you now
but may be important to you in the future so we encourage you to pay attention
to all aspects of the briefing. If you are attending an SBP briefing, please ask
questions of the briefer when needed. Remember, your SBP decision is
generally irrevocable and has profound impact on your family’s future financial
well being.

The Bottom Line
Retired pay STOPS with the death of the Retired
Soldier!

SBP ALLOWS YOU TO PROVIDE A
PORTION OF YOUR RETIRED PAY TO
YOUR ELIGIBLE SURVIVORS
4• While many of you will see this statement as a blinding flash of the obvious-- believe it or not, there are active and retired members and spouses who
don’t know this to be the case - who still believe that retired pay continues after
a Retired Soldier’s death - that checks just keep coming in.
• That’s a myth! The fact is that entitlement to retired pay resides with anddies with the Retired Soldier....period!
• SBP participation is the ONLY way to continue a portion of retired pay to asurvivor.
• The Army’s pledge to “take care of its own” is met by offering Soldiers a way
to take care of THEIR own, through SBP.

Which risk are you willing to take?

NO SBP

SBP

5• Your SBP decision bears only two risks:
1-- the greater risk that your family will be harshly impacted if you die
without SBP in place, and2-- the smaller risk that you might not get back every cent paid for SBP by
way of a survivor’s annuity.

What is the risk of your spouseoutliving you?
Average*Life Expectancy Retired Member

81**Life Expectancy Spouse87

SBP Spouse Annuitants who outlive theRetired Member

67%•

Considers 82% of FY 2023 retired members were male and 18% were female:‒

For male retired members, 69% of SBP spouses are projected to outlive theirretired member sponsor‒

For female retired member, 47% of SBP spouses are projected to outlive theirretired member sponsor

Note 1: Source: DOD Actuary. The SBP Probability Tool can be accessed at:https://actuary.defense.gov/Survivor-Benefit-Plans/*Note 2: Assuming member retired at age 45**Note 3: Assuming survivor is age 47 at member’s retirement
6• OACT (Office of the Actuary) projects 67% of SBP spouses of FY 2023 retirees
will outlive their retiree sponsors (excludes Death on Active Duty). Also, ignores
dropping or adding coverage for divorces and remarriages.
•••

All Retirees: Average Retiree Age = 45. Life Expectancy = 36. Total Life Expectancy = 81•
Non-Disabled Retirees: Average Retiree Age = 45. Life Expectancy = 38. Total
Life Expectancy = 83•
Disabled Retirees: Average Retiree Age = 33. Life Expectancy = 44. Total Life
Expectancy = 77•
Reserve Retirees: Average Retiree Age = 60. Life Expectancy = 24. Total Life
Expectancy = 84
Army Retirees: Average Retiree Age = 46. Life Expectancy = 35. Total Life Expectancy =81•
Non-Disabled Retirees: Average Retiree Age = 46. Life Expectancy = 37. Total
Life Expectancy = 83•
Disabled Retirees: Average Retiree Age = 35. Life Expectancy = 42. Total Life
Expectancy = 77•
Reserve Retirees: Average Retiree Age = 60. Life Expectancy = 24. Total Life
Expectancy = 84
Survivors••Survivors (All DoD) Average Age at Member Retirement = 47. Life Expectancy =40. Total Life Expectancy = 87•
Survivors (Army) Average Age at Member Retirement = 48. Life Expectancy = 39.
Total Life Expectancy = 87•
Survivors (DoD from Active Duty) Average Age at Entitlement)= 75. Life
Expectancy = 13. Total Life Expectancy = 88•
Survivors (Army from Active Duty) Average Age at Entitlement = 75. Life
Expectancy = 13. Total Life Expectancy = 88•
Survivors (DoD from DOAD) Average Age at Entitlement = 37. Life Expectancy =43. Total Life Expectancy = 80•
Survivors (Army from DOAD) Average Age at Entitlement = 36. Life Expectancy =44. Total Life Expectancy = 80
In FY 2023, 82% of DoD retirees were male and 18% female. Among Army retirees,
83% of retirees were male and 17% female•
Of those who elected SBP Spouse or Spouse & Child coverage, 88% of all
retirees were male and 12% female. Among Army retirees, 89% were male and
11% female•
For all retired members who elected SBP spouse or spouse & child, 67% of SBP
spouses are projected to outlive their retired member sponsor. Ignores
dropping or adding coverage for divorces and remarriages•
For male retired members who elected SBP spouse or spouse & child, 69% of
SBP spouses are projected to outlive their retired member sponsor•
For female retired members who elected SBP spouse or spouse & child, 47% of
SBP spouses are projected to outlive their retired member sponsor

6

What is SBP?
• Enacted by Congress in 1972
• Sole means for a Retired Soldier to continue a portionof retired pay to survivors• Coverage is free while on active duty
• Decision at retirement - begin to share cost from dateof retirement• Over eight out of ten retiring Soldiers elect SBP toprotect their family’s financial future

7• SBP is the Plan Congress created in 1972 -- a better military survivor
plan than the two forerunner military survivor plans -- the Uniformed
Contingency Option Act (USCOA) of the ‘50’s, and the Retired
Servicemen’s Family Protection Plan (RSFPP) of the ‘60’s. Both of thoseplans, although good first efforts, were not very successful in providing
Retired Soldiers a means of securing adequate income for their families.
In fact, only about 15% of military Retired Soldiers participated, mainly due
to high cost.
• We remind you that all active duty military members are covered by SBP
automatically at no cost. The government bears the total cost of thatcoverage while you are on active duty. Should you die on active duty inthe line of duty, your retired pay entitlement is calculated as of that date,
and the SBP annuity flows to your surviving spouse from that amount.
• Your decision at retirement, then, is whether you wish to afford yourfamily the same survivor benefits that were in place for you on your lastactive duty day. If so, you begin to share SBP’s cost with the government
by electing to receive reduced retired pay during your lifetime.
• Over eight out of ten retiring Soldiers elect SBP to protect their family’s
financial Future.

The Annuity• Annuity of 55% of selected base amount regardless of
the annuitant’s age• Paid until annuitant becomes ineligible or dies8

You are providing a portion (55%) of your retired pay to your designatedeligible survivors. We will discuss the base amount, SBP cost, and theannuity in upcoming slides.

About Elections• SBP Election must be made prior to retirement‒ If election not made prior to retirement, by law, themember receives automatic full coverage forspouse and or children at retirement• All Soldiers retiring based on an active duty law andReserve Soldiers who elected RCSBP Option A mustcomplete the SBP section of the DD Form 2656,
even if they have no eligible beneficiaries

9• Federal law requires that SBP elections be made prior to midnight of the lastactive duty day. What happens if the election is NOT made before retirement?
Federal law directs the Finance Center to default the election to full spousecoverage. If that happens, the election can be changed only if the Soldier
proves that the government erred in the election process. Is this abureaucracy run amok? No, it is a safeguard which protects a spouse’s
expected benefit.
• For non-regular retirement, only Reserve Soldiers who elected RCSBP
election Option A, (Decline until non-regular retirement). For Reserve Soldiers
who elected Option B or Option C, the RCSBP election becomes the SBP
election and they will not make a new election.
• SBP is paid-up after making 360 payments AND reaching at least age 70.
• Changes in dependents after making SBP election but before retirement
may require new election.

About Elections• Married Soldiers electing anything less than the
maximum spouse SBP coverage allowable under thelaw require spouse’s concurrence• Generally irrevocable but may be cancelled, withspouse concurrence, between the 25th and 36th monthfollowing retirement• Paid-up SBP coverage is paid-up after making
360 payments AND reaching at least age 70
10•In fact, Congress added more “meat” to the process in 1986, when they
began to require married Soldiers to provide their spouse’s written
concurrence in order to make certain elections (details on the next slide).
• Elections are generally permanent and irrevocable. Later we’ll talk about
why “permanent” is a good thing. Plus, we’ll talk about the 1998 law change
which provides a one-time opportunity after retirement to terminate coverage.
• SBP is paid-up after making 360 payments and reaching at least age 70.
• Changes in dependents after making SBP election but before retirement
may require new election.

About Elections• If SBP beneficiaries change (birth, death, divorce,
marriage) between election and date of retirement, a
new DD Form 2656 with SBP election required

11•Changes in dependents after making SBP election but before retirement may
require new election.

SBP Election Categories• Spouse Only

• Former Spouse• Spouse and Child• Former Spouse and Child• Child Only

• Insurable Interest

Notes:• Elections are by category and not by individual• Special Needs Trust can be elected for an incapacitated SBP coveredchild• When “Child” is listed in the category, it assumes “Children” if there ismore than one eligible child12

12

Spouse Election Category•

Effective 1 Apr 08 annuity‒ 55% of “base amount”‒ Taxed as unearned income•

Annuity paid forever‒ Unless remarriage occurs prior to age 55‒ If remarriage ends, annuity reinstated‒ Prior to 14 Nov 86 – annuity stopped if remarriage occurred prior toage 60•

SBP or RCSBP increased by annual COLA•

If there are eligible children, Spouse Only SBP excludes those children
and any future children•

No SBP premium paid after retirement for periods when there is no
spouse beneficiary (effective 14 Oct 76)
13

13

Spouse Election•

Provides annuity of 55% of elected base amount‒ Minimum base amount = $300
‒ Maximum base amount = full retired pay‒ Base amount elected increases with COLA•

Spouse cannot outlive the SBP annuity‒ Paid forever (unless remarriage occurs prior to age 55)‒ If remarriage prior to age 55 ends, annuity reinstated (must reapply)•

SBP annuity increased annually by COLA

14

• The SBP annuity based on amount of retired pay covered.
• The annuity is 55% of the base amount regardless of the annuitants age.
• The annuity is infinite -- meaning, it’s paid for the surviving spouse’s
lifetime! It cannot be outlived!
• Also important is the fact that the annuity is inflation-protected by cost-ofliving-adjustments, just like retired pay.
• A spouse annuitant loses SBP eligibility by remarrying before age 55; buteven in that case, SBP can be resumed if that remarriage ends but theymust re-apply.

Spouse Election•

Taxable as an annuity•

SBP premiums paid pre-tax and increase with COLA since it’s apercentage of the base amount•

Cost stops when no spouse beneficiary•Election by category not by name•

A spouse can only receive one spouse SBP annuity - If spouse isauthorized more than one spouse SBP annuity, they must selectone
15• Former spouses are eligible for coverage under a separate category -under the same cost and benefit rules as spouses.
• You only pay premiums while you have an eligible spouse beneficiary• See Sample SBP Cost slide for cost examples

Spouse & Child(ren) Election• Spouse is the primary beneficiary• Children are secondary beneficiary and receive the annuity
only if spouse loses SBP eligibility (remarriage prior to age
55 or death) and children are still eligible• Child cost is based on ages of member, spouse andyoungest child• Cost of child coverage as secondary beneficiary - very low• Child cost is added to the spouse SBP cost
• If divorced or spouse dies and there are eligible children,
the SBP cost is recalculated as child only

16

• Spouses are primary and children are secondary beneficiaries under thisoption. That means that an annuity is not paid to the children unless the
spouse first loses eligibility through remarriage before age 55 or death.
Even then, the children must be under 18 or 22 to be eligible.
• The child cost when Spouse and Child coverage is elected is very
inexpensive. See Sample SBP Cost slide for examples.

Child(ren) Only Election• Cost based on ages of member & youngest child• Cost stops when no eligible children remain• Cheaper than “spouse” due to finite benefit• Because the child is the primary SBP beneficiary, election is morecostly than the Spouse and Child election where the child is thesecondary beneficiary• If you marry and new spouse is added to SBP coverage, theelection becomes spouse and child‒ Child cost is recalculated as an add on cost to spouse cost
‒ The rules for spouse and child coverage apply

17• This slide shows the basic rules for “child only” participation.
• Child coverage should be considered when determining your family’s
needs.
• And, since child costs are so low, we can think of NO reason NOT tocover eligible children• See Sample SBP Cost slide for examples.

Child(ren) Only Election••••

All eligible children covered at one cost
Cost stops when no eligible children remain
Annuity divided equally among all eligible children
A child can receive more than one child SBP annuity

AnnuityChild Child
1
2Child 2

Suspended

Two eligible childrenChild 1 ages out or marries

Both age out or marry18• A child can receive more than one child RCSBP/SBP annuity. This
question is asked when both parents are military and retiring.

Child Eligibility•Child must be:‒ Unmarried‒ Age: up to 18 or 22 if a full-time student‒ Unmarried Incapacitated child – eligible forever if condition
was incurred while eligible for SBP•

Natural child•

Adopted Child•

Stepchild, foster child who is living in a parent child relationshipwith the military member when that member dies•

When no eligible children remain, child SBP cost stops

19Incapacitated Child Considerations• Research the impact that SBP for a fully
disabled child may have on other benefits
the child has or will receive.
• Election to pay annuity to a special needs
trust for an SBP eligible unmarried
incapacitated child allowed. Contact RSO for
details.

20

Note: It is recommended that you research the impact SBP for a fully
disabled child may have on other benefits the child is or will receive.
Election to pay SBP annuity to a special needs trust for an
incapacitated child allowed. RSO can provide details.

Advice: Seriously Consider Child
Coverage!
Q: Why bother covering my 21-year old son who
graduates from college soon?
A: Because....
– incapacitation may occur while still eligible– “closing” the child category when there are eligible
children closes it forever– family complete? perhaps a step-, grand-,foster- or natural child is in your future• Cost stops when no eligible children remain• Spouse and Child or Child Only SBP is inexpensive

21• What is the risk that you end up adopting a child, raising a grandchild, ora stepchild and closed SBP child coverage for good.
• Also the child who is almost aged out of SBP as you retire may become
fully incapacitated and eligible for SBP for life.
• Based on the low cost of child coverage (see slide 33), it may be to youradvantage to provide child coverage for a short period just in case youneed it in the future.

Former Spouse (FS)• Former spouse coverage can be:‒ purely voluntary‒ incorporated into a written agreement‒ court-ordered (since 1986)•

Divorce prior to retirement:– If court ordered, Soldier should elect former spouse using the DD
Form 2656 and DD Form 2656-1 at retirement or could be held incontempt of court– Former spouse can ensure Former Spouse SBP is establishedby providing DFAS-CL the divorce decree with subsequent court
orders plus a DD Form 2656-10 (Survivor Benefit Plan
(SBP)/Reserve Component (RC) SBP Request for DeemedElection) within one year of the first court order awarding Former
Spouse SBP
22• Former spouse SBP issues remain among the most emotional and most misunderstoodwithin both the active and retired military communities.
• The main point we want to stress is that passage of the Uniformed Services Former
Spouses’ Protection Act in 1982 did not change the basic premise that retired pay
entitlement rests with the Retired Soldier.
• What it DID do was give state courts legal authority to order retiring members to elect“former spouse” SBP coverage; or a retired member to convert existing spouse coverage
to former spouse. Do not confuse this with the issue of a court dividing one’s retired pay a separate matter.
• If divorce occurs during active duty and the court orders the Soldier to elect former
spouse SBP coverage at retirement, the following applies -(1) The Soldier has no action to take until retirement, at which time he/she should
comply with the court order to avoid being in contempt of court - regardless of the Soldier’s
marital status at retirement.
(2) The former spouse has one year from date of the first court order awarding former
spouse SBP to submit a request for a deemed former spouse election on a

DD Form 2656-10, Survivor Benefit Plan (SBP)/Reserve Component (RC)SBP Request for Deemed Election. Attach a copy of the divorce decree,
any subsequent decrees, and settlement agreement. This must be done
within one year of the date of the first court order awarding former spouse
SBP. The election will be deemed if the member fails to make the required
election.

Former Spouse (FS)• Former Spouse SBP coverage can be changed if
court order is amended or vacated by former spouse’s
death• If Former Spouse SBP is voluntary, can cancel Former
Spouse SBP and elect for new spouse within one yearof marriage• Former Spouse and Child(ren) coverage only covers
children of the marriage to the former spouse• When a Former Spouse SBP beneficiary dies, theRetired Soldier can change Former Spouse to Spouse
SBP (contact RSO for details/timeframe)23• If divorce occurs after retirement, the court can order a Retired Soldier to cover aformer spouse only if that former spouse was the Retired Soldier’s covered “spouse”
beneficiary previously. They cannot order a member to enroll the former spouse in a planin which he/she do not participate.
• When former spouse coverage IS ordered, the Retired Soldier has one year
from the divorce to submit a written request (DD Form 2656-6, DD Form 2656-1)
to change spouse to former spouse SBP, the former spouse has one year form
the first court order awarding former spouse SBP (DD Form 2656-10) to deem theformer spouse SBP.
• If action is not initiated within one year of court order awarding former spouse
SBP, the former spouse SBP option is lost.
• When a former spouse SBP beneficiary dies, the Retired Soldier can change theelection to a current spouse. Need to contact the RSO for details and required time frame
to make the election.

Insurable Interest Election Category• Who Can Elect: unmarried Soldiers with no eligible
children• Eligible Beneficiaries: relative more closely related
than cousin; or business associate with financial
interest in Soldier (proof needed)• Base Amount: Must be full retired pay• Cost: 10% + 5% for each full 5 years younger
beneficiary is than Soldier• Benefit: 55% of retired pay less SBP/RCSBP cost24

24Insurable Interest Election Category• Loss of Beneficiary: May elect new beneficiary within
180 days of current beneficiary’s deathꟷMust pay premium to date of previous beneficiary’s
deathꟷIf new beneficiary is more than 5 years younger
than deceased beneficiary, must pay the differencein premium cost between the two beneficiaries todate of initial election with interest

25

25

Insurable Interest Election Category• Can cancel at any time:‒ Effective 5 Oct 94‒ Exception: If insurable interest was elected for former spouse• Disability Retirement:‒ Effective 24 Nov 03‒ Insurable interest is invalid if death occurs within one year of
medical retirement for a cause related to a disability for which
retired‒ Exception: Insurable interest for dependent authorized a
Military ID Card
‒ Premiums will be refunded to designated beneficiary‒ Does not apply to length of service Retired Soldiers26

26

Spouse Concurrence
SBP is a “JOINT” decision for married Soldiers who...
• Decline coverage• Cover less than full retired pay for spouse• Elect “child only”• Are under REDUX retirement plan and do not electfull base amount based on High-3 retired pay theywould have received• Elect Lump Sum under BRS and do not electspouse coverage based on retired pay theywould have received without Lump Sum

27• These are the five elections that require written spouse concurrence.

Spouse Concurrence
Remember it is the Soldier’s election• The spouse can only concur or non-concur with the
Soldier’s election• Spouse refusal to sign the DD Form 2656
constitutes spouse non-concurrence• Spouse concurrence is in the law to protect the
spouseNote: Spouse concurrence not required for aformer spouse election.

28• It is the Soldier’s election and the spouse can only concur or non-concur.
• Spouse concurrence is in the law to protect the spouse.

No Beneficiary at Retirement?
•

Keep SBP literature•

Keep “Army Echoes” - RSO contact info listed•

Contact nearest RSO for a new briefing as soon as eligible
beneficiary is gained•

Decision whether or not to enroll new family members MUST be
made within one year of gaining them or you will close that SBP
category•

Submit DD Form 2656-6 to DFAS within one year of gaining new
beneficiary•

New spouse becomes eligible at 1-year anniversary or birth of achild of that marriage - SBP costs do not begin until then29

• It is important to note that Soldiers without a spouse or children on dateof retirement may have future options. Since they have no eligible
beneficiaries now, they have not closed the door on future enrollment.
• If that is you - “What action should you take if you gain eligible family
members after retirement?”• The answer - “Contact a Retirement Services Officer for a refresher
briefing to help you decide if SBP has a role to play in your new family
circumstances.”• Most importantly, remember the ONE YEAR time limit on making all SBPchanges.
• In you gain a child, the coverage is effective upon your request. If you
gain a spouse, while you MUST take the action BEFORE your one-year
anniversary (i.e., make a written request and provide a marriage
certificate) -- a spouse gained after retirement is NOT eligible until
completing one year of marriage, or earlier, if a child is borne of themarriage.

SBP Termination Feature
25th
month

SBP

36th
month

1 year

No SBP

Termination
PeriodRetired Pay
Starts•Spouse concurrence required•

Barred from future enrollment•

No refund of past premiums•

Law change acknowledges need for flexibility•

One-time only termination for those already retired two years (17 May 98 - 16 May 99)*Note: Does NOT stop RCSBP premiums which are for coverage already received
30

30

Termination Feature•

To terminate you must complete a DD Form 2656-2,
obtain your spouse or former spouse concurrence•

Must submit to DFAS during the period between your25th and 36th month following retirement•

DD Form 2656-2 cannot be signed prior to start of
25th month following commencement of retired pay

31Base Amount• Dollar amount of retired pay participation is based on‒ Minimum, by law = $300
‒ Maximum, by law = full retired pay‒ May choose any amount between• Soldiers retiring under CSB/REDUX may choose full base amountbased on retired pay they would have received under High-3• Soldiers retiring under the Blended Retirement System (BRS) who
elect a lump sum at retirement may choose full base amountbased on retired pay they would have received without the lumpsum election• The base amount like retired pay and the SBP annuity, increase
with COLA32• Now, let’s turn our focus to SBP’s cost.
• The base amount is the dollar amount of retired pay selected by the
Soldier, upon which both the cost and benefit are based.
• During this briefing, SBP costs & benefits are referred to in “monthly”
terms. The SBP “benefit” is called an annuity, which is defined as any
regular, continuing payment.
• The base amount can be any dollar amount between the minimum
allowed by law of $300/month, and the maximum - your full retired pay.
• Soldiers with a Date Initially Entered Military Service (DIEMS) of on orafter 1 Aug 1986 who elected the $30,000 Career Status Bonus (CSB) will
receive a reduced retirement if they retire with less than 30 years ofservice. However, the law allows these Soldiers to elect SBP coveragebased on the unreduced retired pay. The Soldier can elect a full baseamount for SBP based on either the CSB/REDUX they will receive or theHigh-3 method they would have received if they had not elected the CSB.
• Soldiers who enter the military service on or after 1 Jan 18 or opted into
BRS may elect a portion of the retired pay as a lump sum at retirement.
The law allows these Soldiers to elect a SBP base amount of the retired
pay they would have received without the lump sum election.
• The DoD Actuary’s SBP valuation disk demonstrates what base amountgives you the “most bang for your retirement buck,” so-to-speak -meaning, which base amount maximizes the value of your retired pay.

Estimating Your Retired Pay andPremiums• MyArmyBenefits Retirement calculator• CAC or DS Logon• Pulls pertinent information from your record so you don’t have to• Estimates retired pay• Comparison of SBP premium estimates for election categories
https://myarmybenefits.us.army.mil/Benefit-Calculators/Retirement

33

SBP Cost Formula(Spouse Only)• Formula:‒ 6.5% of base amount selected (example below)‒ alternate formula option for active duty retirements
prior to March 1990, medical retirements and nonregular retirement (will be discussed in future slide)
ExampleBase Amount

Cost (6.5%)

Annuity Amount$2,000$130$1,100$3,000$195$1,650$4,000$260$2,20034• The decision that’s been made by someone who participates in SBP isfairly straight-forward: they choose to receive reduced retired pay
during THEIR lifetime in order to continue a portion of their pay after their
death.
• Conversely, one can say that Retired Soldiers who do not participate
have elected to receive full retired pay during their lifetime, knowing that
their full retired pay will die with them.
• Since SBP was designed primarily with military spouses in mind, let’s
examine first costs and benefits associated with spouse coverage.
(Former spouse costs and benefits follow the same rules.)• Simply put, spouse coverage costs 6.5% of the base amount selected.
We’ve said that the base amount is any amount between a minimum of$300 and a maximum of your full retired pay.
• Back when the cost was reduced in 1990, the so-called competition
began to fall away. Truthful insurance & investment competitors began toadvise Soldiers that their product couldn’t beat SBP, but should be used asa supplement to it.

Sample SBP Costs(Ages: Member=44; Spouse=41; Youngest Child=12)Monthly Cost
Base
AmountSpouseOnly

Spouseand Child

Child
Only

Monthly
Annuity

$4000

$260

$260.36$7.20$2,200

$3000

$195

$195.27$5.40$1,650

$2000

$130

$130.18$3.60$1,100• Chart shows the relationship of the costs for Spouse, Spouse andChild, and Child only SBP• Child only child cost is higher than in Spouse and Child SBP since
the child is the primary beneficiary
35•This slide shows examples of the correlation of SBP costs between
spouse, SBP, spouse and child, and child only SBP.
• Child costs are relatively inexpensive compared to spouse costs because
child SBP is for a finite period while spouse SBP is for life.

Tax Free Premiums – Real cost of SBP
No SBP

SBP

Retired Pay$2,000$2,000SBP Cost$0$130

Taxable Pay$2,000$1,870Tax Paid (28%)

$560

$524

Tax Savings

$0

$36

Actual SBP Cost

$0

$94

* The SBP participant receives a $36/month tax savings – and a future
survivor benefit of $1,100. Tax rates will vary based on an individual’s
financial situation.
36•

Threshold Spouse SBP Calculation
2024 SBP Cost Examples Effective for 1 Jan 24
Based on 5.2% Active Duty Pay Raise Effective 1 Jan 24
Base Amount

Annuity

Premium

PremiumMonthly Amount of Retired
Pay Covered$300$1,000$1,011 (Note 3)$1,200$1,400$1,600Monthly Annuity Either
Method
$165
$550
$556
$660
$770
$880

Old Method Threshold Monthly
Cost (Note 1)$7.50$25.00$25.28$44.18$64.18$84.18

6.5% of Base Amount Monthly Cost
(Note 2)$19.50$65.00$65.72$78.00$91.00$104.00$990$1,192$1,210$1,320$1,430$1,540$1,650$1,925$2,200$104.18$140.82$144.18$164.18$184.18$204.18$224.18$274.18$324.18$117$140.82$143.00$156.00$169.00$182.00$195.00$227.50$260.00$1,800$2,166.43 (Note 4)$2,200$2,400$2,600$2,800$3,000$3,500$4,000Note 1. SBP Cost Threshold Method: 2.5% of threshold amount + 10% of the remainder of base amount.
Note 2. SBP Cost 6.5% Base Amount Method: 6.5% of the base amount.
Note 3. Threshold Amount (that which costs 2.5%) is $1,011; cost is $25.28.
Note 4. Base amounts on or above $2,166.43 receive best premium under SBP cost 6.5% method cited above(0.065 times base amount).
Note 5. The SBP Program Manager will send out the updated amounts annually.
37• The SBP threshold method Only applies to a Soldier who meets one of thefollowing criteria: entered service prior to 1 Mar 90 if retiring for active duty lengthof service, medically retiring, or retiring from the Reserve Component with a nonregular retirement. For these Soldiers, two SBP spouse cost methods are available.
The most advantageous one is used by DFAS.
• This chart shows the relationship between the SBP spouse threshold costcalculation, 2.5% of the threshold and 10% for any base amount that exceeds thethreshold, and the new spouse cost calculation 6.5% of the base amount.
• The chart also shows that amounts that exceed a base amount of $2,166.43 forretirements in calendar year 2024, the 6.5% spouse cost calculation is the mostadvantages.

37How can I tailor SBP to meet my needs?
Think “Base Amount”• Challenge: What base amount should I cover to meet
our needs?
• Solution: Divide the goal amount by 55%$2,000/0.55 = $3,636• Base amount increases with COLA like retired pay andas a result, so will the premium cost
Annuity$2,000Base Amount Required$3,636$1,000$1,81838• If you conclude after studying SBP that your family’s needs can be met
by covering less than your full retired pay, this slide shows you how topersonalize your participation.
• First, determine your goal - what annuity you wish to produce for yourfamily (considering all other guaranteed sources of survivor income).
• Then, divide that goal amount by .55 (or 55%) to determine how many ofyour retirement dollars you should cover as your base amount to achievethat result.

“30-Year Paid-Up Provision”
Since 1 Oct 08 no premiums after:• 30 years of paying SBP Premiums (360 payments)AND• reaching age 70
360 payments (30 yrs)
360 payments + 24 payments to get to age 70

38 40

70
39

• Our last item on “cost” is this.
• Legislation passed in 1998 provides that SBP will reach “paid-up” status
for members when they make 30 years of payments (360 monthly
payments) and reach age 70.
• “Paid-up” = no further cost obligation; but the annuity remains payable toyour designated beneficiary.
• Remember that adding this paid-up feature results in stopping premiumfrom a significant number of participants; yet continuing the governments
obligation to pay annuities.

Replacement Value of Annuity
Ret. Pay: $5,000
Member’s Age: 43

Spouse’s Age: 41

Spouse’s Age at
Death of Soldier

Annual After Tax SBP
Benefit*Replacement Valueof SBP

41$29,040 ($68,973 at 87)$960,00051$20,221 ($68,973 at 87)$990,000

61$28,377 ($68,973 at 87)$971,50071$32,933 ($68,973 at 87)$778,00081$38,220 ($68,973 at 87)$408,500

This slide shows that it takes a surprising amount of life insurance to replace
SBP even as the spouse beneficiary ages because SBP is inflation protected
and life insurance is not. Assumes inflation at 2.5% and insurance was invested
with a rate of return of 4%. Assumes spouse life expectancy of age 87.
*Face value of insurance needed to equal SBP benefit.
Note: This program can be accessed on the DOD Actuary homepage, https://actuary.defense.gov/
40• This is the scenario for a 42-year old, male with a 41-year old spouse.
This example uses a pay entitlement and SBP base amount of $3000.
Assumes 2.5% inflation.
• The figure $579,000 represents the amount of an insurance product thisRetired Soldier needs to have in place to equal the SBP benefit If death isimmediately at retirement and the spouse lives until 87.
• For this member, at age 72, SBP is no-cost. Remember, starting on 1
Oct 08 there are no premiums paid for SBP after age 70 and 30 years of
SBP premium payments.
• This spouse may live longer than the actuarial average.

Inflation Adjusted Annuity
Ret. Pay: $3,000
Member’s Age: 42

Spouse’s Age: 41

Spouse’s Age at
Death of Soldier

Annual After Tax
SBP Benefit*Replacement Valueof SBP

41$17,424$579,00051$20,221$599,000

61$28,377$589,00071$32,933$470,00081$38,220$247,000

This slide shows that it takes a surprising amount of life insurance to replace
SBP even as the spouse beneficiary ages because SBP is inflation protected
and life insurance is not. Assumes inflation at 2.5% and insurance was invested
with a rate of return of 4%.
*Face value of insurance needed to equal SBP benefit.
Note: This program can be accessed on the DOD Actuary homepage, https://actuary.defense.gov/
41• This is the scenario for a 42-year old, male with a 41-year old spouse.
This example uses a pay entitlement and SBP base amount of $3000.
Assumes 2.5% inflation.
• The figure $579,000 represents the amount of an insurance product thisRetired Soldier needs to have in place to equal the SBP benefit If death isimmediately at retirement and the spouse lives until 87.
• For this member, at age 72, SBP is no-cost. Remember, starting on 1
Oct 08 there are no premiums paid for SBP after age 70 and 30 years of
SBP premium payments.
• This spouse may live longer than the actuarial average.

Replacing SBP with Life Insurance Proceeds
How Long Do They Last?
Retired 2023 and dies in 2043 when spouse would be age 60
Monthly Retired Pay = $3,300; Life Insurance = $500K;
Monthly SBP Annuity = $1,815
Assume $500K with rate of return = 4%
Assume spouse withdraws from the life insurance the annual SBP annuity amount

2.5% Average Inflation

5% Average Inflation$600,000$500,000$400,000$300,000$200,000$100,000$0$600,000$500,000$400,000$300,000$200,000$100,000$06065Insurance Proceeds

70

75

78

SBP Annuity After Tax

60
Insurance Proceeds

63

65

70

SBP Annuity After Tax

Because of inflation - insurance will run out sooner than you think!
SBP will continue to increase with COLA
Note: Program available at https://actuary.defense.gov/ and click on “SBP Programs”.
42• This example, based on $3,300 retired pay and SBP base amount,
illustrates how long $500,000 of life insurance lasts when withdrawn in theamount equal to the annual SBP annuity based on different COLA averages.
• Assumes death occurs in 2043 and spouse is 60.
• With an average COLA increase of 2.5%, a $500,000 life insurance policy isdepleted in 18 years when the surviving spouse is 78.
• With an average COLA increase of 5%, a $500,000 life insurance policy isdepleted in 10 years when the surviving spouse is 70.
• That doesn’t take into account purchase of any big-ticket items, paying off amortgage, financing education, etc.
• Since a spouse life expectancy is 87, with 2.5% average COLA the spouse
lives 9 years without insurance proceeds to replace SBP. With a 5% average
COLA, the spouse lives 17 years without life insurance proceeds to replace
SBP.
• Most importantly -- SBP continues for a lifetime, increasing by COLA. In thisexample, the spouse can live well past the expected life expectency.
• The Rate of Return of 4% is the DOD Board of Actuaries latest projection as
to what rate the Military Retirement Fund will earn.

Comparing SBP to Life Insurance• It takes a surprising amount of life insurance to replace
SBP• Unlike life insurance, SBP does not consider age orhealth when determining premium cost
‒ As you age it may become more difficult to find alow cost option‒ If retired for disability, insurance may be very
expensive or even impossible to obtain due toexisting medical conditions• Unlike SBP, life insurance does not have COLA
increases so it is not protected from inflation
43• As you have seen form the previous slides, using the DOD Actuary
programs, how much insurance is needed to replace SBP.
• Since you don’t know how many years your spouse might outlive you,determining what is adequate regarding insurance is impossible. A crystal
ball is not needed with SBP - it simply cannot be outlived.
• SBP’s inflation-fighter is its guaranteed cost-of-living adjustments(COLAs). Increasing life insurance is needed as one ages, due to
inflation’s eroding effect on the dollar’s purchasing power.
• Try to adjust your thinking from short-sighted to long-term. When you
limit your view, life insurance may appear more attractive (i.e., cheaper)
than SBP. But, if you compare SBP costs and benefits with life insurance
costs and benefits for each year in the future, you’ll see that insurance
costs must increase dramatically based on the insurer’s increased risk of
paying a policy. Since SBP simply protects your ever-increasing retired
pay, its value rises at the same rate -- even after it begins to be paid as anannuity.

SBP Cost of Living Adjustments(COLA)
Yearly SBP
Annuity

The effects of COLA on SBP over 40 years for a SFC with a$2,800 SBP base amount, yearly annuity is $18,480 in 2023.

$140,000$130,099$120,000$100,000$73,167$80,000$60,000$40,000$20,000$-$49,620$18,480

10 Yrs20 Yrs30 Yrs40 Yrs

You pay in today’s dollars for an SBP annuity paid in future dollars• 2.5% COLA represents the DOD actuary assumption• 3.5% COLA
• 5% COLA

All calculations made using DOD Office of the Actuary tables
44

This slide shows what happens to SBP based on COLA raises to SBP due to
inflation. While the increases in SBP are dramatic over time, in actuality thebuying power of the annuity remains the constant. Insurance does notincrease over time based on inflation without buying additional insurance.

Cost in Today’s Dollars; Benefit inTomorrow’s Dollars
How long does your survivor need to receive an annuity before thatannuity exceeds how much you paid into it?
Length of time
Premiums Paid

Years of Annuity Received to Exceed
Premiums Paid

5 years

7 months

10 years

1 year, 1 month

15 years

1 year, 6 months

20 years

1 years, 10 months

25 years

2 years, 2 months

30 years

2 years, 5 months

Note 1: Based on a 2.75% long term COLA
Note 2: No further cost after 360 (30 years) premium payments and age 70
Note 3: Based on DOD Actuary
45•This slide shows how long your spouse would have to live to receive back all
the premiums you paid for SBP.
•Also this slide shows the fact that you are paying in todays dollars for abenefit that will be paid with COLA increases added that the pay back after 30
years of paying SBP is much sooner than expected.

SBP Positives
The previous slides discussed and showed examples ofthe following positive aspects of SBP. You need to takethese into account when you make your SBP decision.

• Government-subsidized plan
• Tax-free premiums• Inflation-adjusted annuity• Flexible: can terminate between the 25th and 36thmonth of retirement46• As you went through this briefing, you should have seen the positives listed in thisslide.
• The government is paying on the average close to 50% of the SBP cost and the costof administering the program and paying SBP annuities are paid by the government.

SBP Positives (continued)• “Paid-up” after 30 years paying premiums and age 70• Survivors cannot outlive annuity• Age, health, smoking, sex, lifestyle -- not considered• Cost in today’s dollars; benefit in tomorrow’s dollars• Can only be changed by Congress• Income safety net; peace of mind
• Every active-duty Soldier enrolled at no cost from day one• Subsidized by the government

47• As you went through this briefing, you should have seen the positives listed in thisslide.
• The government is paying on the average close to 50% of the SBP cost and the costof administering the program and paying SBP annuities are paid by the government.

Medical Retirement SBP
Considerations• Soldiers being retired with a service-connected VA disability
need to consider the following in their SBP decision‒ SBP and DIC‒ SBP coverage for survivors, if VA determines death isnot service-connected and DIC is not payable‒ Withdrawal from SBP based on a VA Total Disability
Rating‒ SBP premiums start from effective date of theretirement, even if retroactive retirement date
‒ What happens to family if SBP is not elected and the VA
does not consider the death to be service-connected

48

This slide and the following five slides provide important information
concerning SBP to Soldiers being retired with a VA service connecteddisability rating.

SBP and Dependency and Indemnity
Compensation (DIC)
SBP

DIC

Annuity for survivors if Retired
Soldier dies

Annuity for survivors if Retired
Soldier’s death is determined
service connected by VA

Taxed as unearned income

Tax FreeRetired Soldier pays premiums

No premiums

Survivor receives full SBP

Survivor will receive full DIC

Note: Public Law 116-92 phased out the spouse RCSBP/SBP offset by
spouse DIC. Offset eliminated effective 1 January 2023.
49

If not rated totally disabled for required period of time, there is no guaranteethat death will be considered service connected by the VA and the spousewill receive DIC.
Electing SBP provides coverage for survivors in cases where death is notservice connected and if service connected, the premiums paid for spouse
SBP offset by DIC are refunded to the surviving spouse. Note: The spouse
SBP offset by DIC was eliminated effective 1 January 2023.

Withdrawal from SBP Based on
VA Total Disability Rating• Withdrawal is allowed because surviving spouse will qualify for
DIC benefits and prior to 1 January 2023 there was an offset of
the SBP by DIC• Consider carefully before withdrawing since your spouse
would be eligible to receive both the SBP and DIC in full
• Withdrawal requires written consent of beneficiary• If Retired Soldier withdraws from SBP, the surviving spouse will
receive a refund of all SBP costs paid (after the VA verifies DIC
will be paid)• SBP provides coverage for survivors when death isnot service connected50

50

Withdrawal from SBP Based on
VA Total Disability Rating
VA Total Disability Rating Withdrawal Timeframes:• May withdraw from SBP, if rated by the VA as totally disabled, if rating has
been held not less than 5 continuous years from last date of active duty
• May withdraw from SBP, if rated by VA as totally disabled for 10 or more
continuous years effective at a date after last time on active duty
VA Totally
Disabled

SBP
Withdraw
5 years

Retirement
VA Totally
Disabled

10 years

SBP
Withdraw
51

The law recognizes that if your death will be considered service connected andyour spouse will receive DIC, that you should be allowed to withdraw from
SBP.
When this law was enacted, the big consideration was that SBP was offset by
DIC and therefore in some cases meant that the DIC will exceed or almost
exceed SBP. At the time it may have been in your interest to withdraw from
SBP and not have to pay the SBP premiums. At your death your spouse will
only receive the premiums you paid for spouse SBP. However, effective
January 1, 2023 there will no longer be an offset of SBP and DIC and your
spouse will receive SBP in full if participating in SBP.

51

Payment of SBP Cost When Retired
Pay is Completely Offset by VA
Disability Pay• If your VA disability compensation completely offsets
your retired pay and you do not receive CombatRelated Special Compensation (CRSC), there is noautomatic deduction of monthly SBP premiums
available‒ Unpaid SBP premiums carried over into a new
billing month will accrue a 6% interest fee

52

Payment of SBP Cost When Retired
Pay is Completely Offset by VA
Disability Pay
Options to Pay SBP
Premiums

Process

Authorize VA to deduct SBP
premiums from VA disability
compensation

Reach out to your servicing VA office to help
you complete the DD Form 2891 and submit
the completed DD Form 2891 to DFAS – VA
will pay directly to DFAS

Direct payment to DFAS

Submit payment to:
Defense Finance and Accounting Service
DFAS-CL, SBP and RSFPP Remittance
P.O. Box 979013
St. Louis, MO 63197-9000

Note: Do not submit an SBP premium direct payment or submit a DD Form 2891 to VA
until you verify on your Retired Account Statement (RAS) that your retired pay is offset by
VA disability and you are unable to pay your SBP premiums.
53

Servicing VA office will complete their portion of the DD Form 2891 and Retired
Soldier can submit the completed a DD Form 2891 (Authorization For RSFPP
and or SBP Costs Deductions) to DFAS to authorize VA to deduct your SBP
premiums from your VA disability compensation and pay directly to the
Defense Finance and Accounting Service or you can also pay SBP premiumsby direct payment to the following address:
Defense Finance and Accounting Service
DFAS-CL, SBP and RSFPP Remittance
P.O. Box 979013
St. Louis, MO 63197-9000

Actual Widows’ Views on SBP“....each day I thank my late husband for his taking
SBP....it allows me to live with decency and independentof others....”“….I want to thank the Army for sending me an annuity tolive on. From the bottom of my heart I am so thankful.
With no life insurance on my late husband, without theannuity, I could not live in the wonderful retirement
community….”

54

For More SBP Information….
Log on to:https://soldierforlife.army.mil/Retirement/survivor-benefit-plan
https://myarmybenefits.us.army.mil/
Contact your nearest RSO:
https://soldierforlife.army.mil/Retirement/rso

55• For more information on RCSBP you can visit the following listed sites orcontact the listed contacts. These sites and contacts can also provide
information on other retirement related issues.

Remember:
Retired pay STOPS with the death of the Retired
Soldier!

SBP ALLOWS YOU TO PROVIDE A
PORTION OF YOUR RETIRED PAY
TO YOUR ELIGIBLE SURVIVORS56

If your retired pay ending at your death will be a hardship to your family, youneed to consider continuing a part of your retired pay for your survivors
through SBP.

57