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Survivor benefit plan

Survivor benefit plan. Kate Horrell financial educator KateHorrell.com. Income continuation plan for dependents of deceased active duty and retired servicemembers . Two parts: active duty and retiree Lots of details and some choices. What is SBP?. Choice made at retirement

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Survivor benefit plan

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  1. Survivor benefit plan Kate Horrell financial educator KateHorrell.com

  2. Income continuation plan for dependents of deceased active duty and retired servicemembers. • Two parts: active duty and retiree • Lots of details and some choices What isSBP?

  3. Choice made at retirement • Choice made by spouse • Assume it is irrevocable* • VERY IMPORTANT Retirement

  4. Cost, as much as 6.5% of retired income • Irrevocable decision • Income is taxable* cons

  5. Lifetime income* • Cost of living adjustments • Low cost coverage • Cannot be cancelled or modified due to age or illness • Not impacted by Social Security • Premiums paid pre-tax* • Premiums end when aged 70 and have paid for 30 years pros

  6. Cost is 6.5% of covered amount • Covered amount may be full amount of retirement pay, or a portion thereof cost

  7. Survivor benefits are paid as annuity • 55% of covered amount • Cost of living adjusted • Taxable income • May be offset by DIC or VA benefits benefit

  8. Spouse • Spouse and children • Children only • Former spouse • Natural interest person* Eligiblebeneficiaries

  9. SBP benefits are reduced, dollar for dollar, by the amount of DIC benefits Crazy and complicated stuff

  10. Overall financial situation • Health and age of spouses • Likelihood of receiving DIC Howto decide?

  11. Automatic • No cost • Full coverage (100% of pay equals 55% replacement income) • Offset by DIC Activedutysbp coverage

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