More SBP details

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Let me disrupt the posting schedule for a day with some additional SBP information from Monday’s post.

One of the book’s contributors forwarded me not one but four separate SBP briefs put out by the Air Force Personnel Center. With the gracious permission of Mr. Dan McCullough, who added some clarification slides, here they are.

This 50-slide brief includes SBP details for divorces, disability retirements, and “insurable interest” provisions.

This five-page document presents more background to consider on the SBP decision: gender, health, family longevity, spouse’s income, expenses, your survivor’s needs, and the SBP’s COLA benefits. If you’re reviewing your options with an insurance agent then you’ll also want to read about SBP “alternatives”. (Hint: there really aren’t any trustworthy ones at these government-subsidized prices.)

This three-page document is an actuarial analysis of the SBP. You male retirees may want to note the likelihood of your spouse outliving you, and by quite a few years.

Just to emphasize the concept of the SBP COLA, this study compares the cost of a lump-sum insurance policy to the SBP. Initially both programs yield the same payout per month, but in later years the SBP’s COLA starts to outperform the insurance policy. To make matters worse (for the insurance company), a policy with equivalent COLA features would cost far more money.

Tomorrow:  the Reserve Component SBP, and this time I really mean it.

Related articles:
Survivor Benefit Plan

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WHAT I DO: I help you reach financial independence. For free. I retired in 2002 after 20 years in the Navy's submarine force. I wrote "The Military Guide to Financial Independence and Retirement" to share the stories of over 50 other financially independent servicemembers, veterans, and families. All of my writing revenue is donated to military-friendly charities.

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