Military Retirement Planning
The Survivor Benefit Plan is not the retiree’s decision alone. Under 10 U.S.C. § 1448(a)(3), a spouse must provide notarized written consent before a retiree can decline or reduce SBP coverage. This tool is designed for both of you.
Enter your monthly retirement pay and ages for an immediate breakdown.
The Survivor Benefit Plan is a DoD annuity program that pays a monthly benefit to a surviving spouse or dependent if the military retiree dies. In exchange, the retiree pays a monthly premium of 6.5% of the elected base amount — typically their full retirement pay — from the day they retire until either death or 30 years of payments, whichever comes first. After 30 years, coverage becomes free.
The survivor receives 55% of the elected base, adjusted for inflation with each government COLA. That inflation protection is the central advantage SBP has over most term life alternatives — a fixed life insurance payout loses purchasing power every year, while the SBP annuity tracks the same index as the retiree’s own pension.
The alternative most often discussed is using that 6.5% premium to buy term life insurance instead, and investing the difference if term costs less. Whether that strategy wins or loses depends on three things: how long the retiree lives, how long the survivor lives, and what investment return the portfolio earns. The full comparison — including a year-by-year chart of portfolio balance versus SBP annuity — is available in the authenticated tool once you create a free account.
One critical asymmetry: if the retiree declines SBP and the spouse predeceases the retiree, all premiums paid under a term life/invest strategy are still in the portfolio — available to the retiree. If the retiree elects SBP and the spouse predeceases the retiree, all SBP premiums paid are forfeited with no refund and no cash value. This is not an argument against SBP — it is a crucial variable that must be part of a complete household analysis.
Statutory authority: 10 U.S.C. §§ 1447–1455 (Survivor Benefit Plan); 10 U.S.C. § 1448(a)(3) (spousal consent requirement).
DIC offset elimination: National Defense Authorization Act for FY2023, Pub. L. 117-263, § 641. Effective January 1, 2023.
Premium rate: 6.5% of elected base amount, per DoD Financial Management Regulation 7000.14-R, Volume 7B.
After-tax calculation: Illustrative only. SBP premiums are generally deductible from taxable income for federal purposes. Actual tax impact depends on individual circumstances. Consult a qualified tax professional.
