Military retirement pay stops when the retired military member dies. The Survivor Benefit Plan (SBP) is a government subsidized program created by Congress which makes it possible for retired members to ensure that after their death, their eligible survivor(s) receive a portion of the military retirement pay in the form of a monthly annuity. The annuity payable is 55% of the base amount elected. The base amount may be Full Gross Retired pay, or any dollar amount, as low as $300. The SBP election is made at the time of retirement. If SBP is voluntarily declined at the time of retirement, then no annuity can be established after the retiree dies.
All retiring military members (this includes those retiring for medical reason) MUST complete a DD Form 2656, Data for Payment of Retired Personnel, with their SBP Counselor. If a member fails to complete a DD 2656 prior to their retirement date, DFAS will automatically establish MAXIMUM SBP coverage and deduct premiums for that coverage from the military member's retired pay, even if the military member is single. |
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Facts Facts About SBP |
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SBP premiums are tax deductible
and are deducted from the military member's retirement pay |
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SBP annuities are taxable income for the survivor(s) |
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Only one SBP annuity is established, which must be equally distributed among designated survivors |
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SBP provides peace of mind to
the retiring military member that their survivors will be supported after
the member has passed away |
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SBP increases with cost of living adjustments to keep pace with future inflation |
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Gender, health and lifestyle are not factors in either SBP premiums or annuity payable |
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SBP premiums are suspended if there is no eligible beneficiary |
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EVERY retiring military member MUST make a valid SBP election BEFORE
retiring. Failure to do so will automatically enroll the member at the full
rate and premiums will be deducted from the retired pay. |
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