More SBP details


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

Does this post help? Sign up for more free military retirement tips via e-mail, Facebook, or Twitter!

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.

  1. […] SBP is a wonderful insurance policy because half of the premiums are subsidized by the federal government, but if you’re financially independent and the payout does not change your lifestyle then you have no need to buy it in the first place. […]

  2. Reply
    Can I Count On A Military Pension? March 6, 2014 at 5:01 AM

    […] retire at exactly 20 years of service. Calculate your pension for that rank. If your spouse elected full Survivor Benefits Program then your pension income would drop by 6.5%, and after federal taxes it would drop by another […]

  3. […] value” estimate of a military pension Retirement planning: “Just tell me what to do!” More SBP details Military long term care insurance Interview: what’s wrong with long-term care insurance? 23andMe […]

  4. […] I retired from active duty, spouse made a decision that dramatically changed our quality of life: she declined Survivor Benefit Plan coverage. Neither one of us wanted to pay 6.5% premiums for 30 years. More importantly, we didn’t need […]

  5. […] Rose:  The Life Insurance Movement Pricing life insurance and investments Survivor Benefit Plan More SBP details The Reserve Component Survivor Benefit Plan Civilian version of a Life Insurance Needs Calculator, […]

Comment? Question? What's on your mind?