I strongly advise to NOT waste one nickel on an SBP. "When I got the news, I was quite delighted. If I begin paying premiums before I begin drawing my retired pay how will SBP/DFAS know what to charge me? Im 59 so remarriage cant change anything. Many, many people outlive life insurance proceeds. Great question. It is very important that retiring service members and their spouses understand all the aspects of SBP so that they can make the right election at the time of retirement. I am unaware of any suicide-related qualifications for Survivor Benefit Plan payments. UnbeknownstUnknown to him and a number of other retirees, DFAS had changed its interpretation of the law in May2013and refused to allow him to transfer the benefit. And if you commit suicide, spouse wont get jack S**t. I found that the reason they offer the out after the 5 years is that you cannot get both and wouldnt need the SBP since youd get the DIC. Comment * document.getElementById("comment").setAttribute( "id", "abdb2766c9bb6c7b9354065e65ae13d8" );document.getElementById("ef5eefa35b").setAttribute( "id", "comment" ); Notify me of follow-up comments by email. Id definitely keep an eye on it, though! https://www.katehorrell.com/understanding-sbp-dic-offset/. Im curious what his beneficiary designations said at what points in time. I don't like spam, and I won't send it to you., either. I m not planning on remarrying due to my poor health. If it is forced by the process, then another option may be needed. Does the requirement for SBP to be paid in full 360 payments and reaching age 70 apply to all ages?. In this article, I list four reasons why you may want to keep SBP even if you are 100% disabled. You can use the formula from the Office of the Actuary to determine real costs. There is no SBP information whatsoever on my husbands myPay account. A spouse may I have been looking around some websites like DFAS, Military.com, DODWarrior to name a few and have found that upon retirement the spouse has to consent in writing to reduce coverage or elect no coverage, I have not found any paper work showing that my mother made this election nor have I found a SBP election certificate (DD-1883). The Office of Survivors Assistance has prepared a list of the most Frequently Asked Questions (FAQ's) to assist you. Time passed and I just remembered about this when they sent me the certificate of my benefits and in the certificate it included SSIA amount, and so I called them to ask why is it showing that Im receiving an SSIA amount. Your monthly pension is reduced by 5%*. Required fields are marked *. As a smart friend says, Life insurance is for when the insured doesnt live as long as youd hope. Massachusetts also doesn't allow for portability. It is hard at any age. My husband divorced his now ex-wife while still active in the Military. Yes. You may find more helpful information in the SBP portion of this packet. Your monthly FERS pension is reduced by 10%. Im not sure if the retirement officer told you the wrong information, or explained it in a way that was confusing. Thank you so much for your answers. Accordingly, I am strongly considering a $1M term policy, primarily to handle the mortgage if/when I pass before its paid off. Hi Kate. Coverage for active duty service members is automatic and does not require any action or payments. I do wonder about the amount youve chosen. My husband was not good at money and to be honest I didnt know anything until he died that I would not be receiving his pension. Survivor: For most widows and widowers, the earliest age of eligibility for survivor benefits is 60 (50 if you are disabled). I'm Kate! Im guessing that I will still be making this payment in my early 90s. Your monthly FERS pension is reduced by 5%. Do this by submitting DD Form 2656-1 requesting the conversion of. My question is: If I become 100% in the next years (appeal in the mail) does it make sense to continue paying into SBP after the five-year mark? I dont know of anyone who has dealt with this situation. The value in SBP is the inflation adjusted, lifetime guaranteed income. Many, many retiring military members find themselves paying much higher rates, or completely uninsurable. (I dont know how thats coded on your paperwork.) My suspicion is that spousal consent came into effect after 1982, but I am not sure and Im surprisingly having a hard tie pinning down the date. The 10% they withheld is that the amount you instructed them (on your W-4 form) to withhold, or did they select to withhold that amount on their own? Please try again. Will it stop automatically? So now no SBP, 1. Just be sure if you do marry or have a child that you make those changes within one year. He is worried that he been wasting his time paying for the SPB? SBP premiums are deducted from retired military pay pre-tax, which reduces the overall cost of the premiums. My husband never discussed pension amount or anything of the sort when he retired. Thanks. I did see that you anticipate a second career after the military. During this difficult time, we know that you will have questions about survivors benefits and how to obtain them. My mother was just informed by DFAS that my father had not elected SBP when he retired. My question is Will I receive back pay from June to present day? Ill let you know what I find out. The benefit drops from 55% to 35% assuming the spouse elects to receive social security. Good luck with trying to find a site that furnishes all the information. I have considered going to the nearest USAF base personnel offices and speak with a SBP knowledgeable officer or NCO. Make up a chart that reflects the earnings of a surviving spouse of an E7 with 22years. Many people find that a combination of term insurance and SBP fulfill their needs better, and you dont have to opt to cover the full amount of your military retirement pay. DFAS would not give me any information even though I mailed in the forms to claim SBP and they mailed back forms for direct deposit and mailed them back but nothing has happened since and that has been months. the back amount debt would be paid by the SBP premiums + interest. I am concerned about problems he might encounter after my death if taxes are to be collected since he is not a US citizen and does not have a SSN. Thank you much and appreciate the information you put forth on this site. Will they reimburse me for the last 20 years and what should I really ave gotten since now his disability was 100%. DFAS told me that it is listed all the time in the ECHOES publication and that he should have known to do that. I have put hours into researching for an answer to this question and finally came across your site. This means less tax and less out-of-pocket cost for SBP. It is my understanding that those bills would eventually be paid out of any beneficiary payments, but if all your kids have aged out, then you shouldnt be adding any new premium costs. No one changed the rules mid-way through the game. In the 2018 National Defense Authorization Act, the SSIA rate was set at $310 per month for 2018, and was made permanent. I have two questions: Hi, I cannot seem to get a clear answer from anyone at DFAS on anything related to my husbands pension (SBP) since he died. Plus college stuff, landlording, moving, taxes. Thanks for what you do! I thought that the SBP can not be cancelled without the spouses signature. Your monthly pension is reduced by 10%. Thanks for all of the information you have provided. I would be grateful if you can help. Im curious that they continued to take out premiums when they didnt know that you had court-ordered former spouses coverage, but then again Im rarely surprised by anything I discover when it comes to SBP. When they requested documents, she sent them in. So, I guess DFAS denied the former spouses claim and then the Appeal Board overturned it. Instead, it is placed in a suspended status pending a possible future marriage. Thank you for your help. There is one regular opportunity to cancel your SBP coverage after retirement. But there were years of struggle when her husband died; now all those years of struggle without support suddenly faded away. Im glad you are happy with your decision not to purchase SBP, but please do not counsel others without all the facts.. Now if you have already been receiving the DIC payments, youre only going to receive one of the benefits fully unless you elect child only, advisable if your kids are still young but know that it ends after college. I found out that I did not get paid the right amount of SBP.That it is no more an off set decission of Sharp vs US government. I have no idea why. Your SBP premium should automatically decrease once you dont have any eligible children. Income from the SBP annuity is fully taxable. 2. But in other years, other risks might be larger. Once youve reached those two milestones, your coverage remains in force without any more payments due. I am an active duty service member who is coming up on my 20 years. What is DFAS currently saying about the situation? Upon Loss of Spouse SBP spouse coverage is not terminated when a spouse loses eligibility (spouse dies or member and spouse divorce). If you click on an advertisement or link, I may be compensated. If she dies after he retires (and before he dies), can he then name me as his beneficiary in her place? Im a little surprised that the lawyer is willing to take on the case, but I often dont understand the things lawyers choose to do. Important note: The SBP-DIC offset is being eliminated over the next few years. That child will be turning 18 in January and not attending college. The spouse, who was originally denied benefits, nearly 30 years ago, has been approved benefits and they backdated them! Former spouse is now remarried-how do I check or verify that my name was not replaced with the new spouses on the SBP? I think this benefit sounds good but is paying for 2 different policies common? Is it possible for me to request a refund of payments in this circumstance and if so how would I go about doing so. Helping Military & Federal Civil Service Spouses Get Paid. As you are 100% P&T, you will have more windows to withdraw from SBP than the average retiree. What am I missing? My grandpa was in the air force and has recently retired. Thank you. This is a great website. In addition, a compelling feature of SBP is the annual cost of living adjustment. Good luck to you. There is no health examination or medical underwriting for SBP coverage. I guess I am trying to figure out what the term spouse cost is defined as and then if the the premiums do not continue if something were to happen to my husband. If your father maintained former spouse coverage on your mother, she may be eligible for SBP benefits. I have no proof if he did this or not. For many people, it lasts between 6 and 12 months, but not everybody experiences it, and sometimes it goes on for longer. God Bless and take care . They also send a claim form for SBP for me to fill out. Longevity risk is a serious issue with lump sum payouts or investments. My husband hasnt made an SBP payment since he was declared 100% P&T disabled in 2009. You can not start your SBP at this time. The most important thing to know is that (with few exceptions) all aspects of the SBP decision are made when the service member retires. SBP coverage can be transferred to the retiree's current spouse provided they notify DFAS of the former spouse's death within one year of its occurrence. 1-Spouse: The surviving spouse is the beneficiary of RCSBP upon the death of the Soldier/Retired Soldier. <>>> Assume no DIC and go from there. I have a disability rating of 80% so not all of the payment is taken out of my pay. If military retirement pay is a small part of your overall income strategy, then SBP may not be right for you. Im not aware of any provision to continue having SBP coverage without payment until you have hit the 360 payment and age 70 requirements. Hi Kate, There is no refund of premiums if you make this choice. This program is called the Survivor Benefit Plan (SBP). Its somewhat irrelevant to your specific question, but it may inform the big picture. Im 50% from the Marine Corps. Premiums for child coverage are based upon the age of the retiree, the age of the youngest child at the time of retirement, and the age of the spouse/former spouse, if combination coverage is selected. My husband has an ex-wife and their divorce decree states he must select her as her SBP beneficiary. SBP is not a form of life insurance. Could you please share the appropriate regulations or laws? Hes is either 90% or 100% VA rated disability and his Medical retirement (8years )is rated at 70%. My beneficiary has died and I have no other beneficiary. The Survivor Benefit Plan (SBP) is often the most important decision of your financial life, and it is also probably the most confusing. 2.5% of the first $635 ($15.88), plus 10% of the remaining covered amount. Hello Shellie. The requirement for SBP to be paid in full is 360 payments AND reaching age 70. https://www.dfas.mil/retiredmilitary/about/aboutus/customer-service.html (Youre probably considered an annuitant even though youre not receiving an annuity.) This post is part ofThe Comprehensive Military Retirement Checklist. I understand that you mean well, but trying to convince people to sign up for SBP is wrong. Very informative article Kate, answered a lot of questions I had. Therefore, thelack of apost-tax premium option isnt negatively affecting many people. The only thing that happens at 360 payments is that he does not make any more SBP premium payments. Heres the complete list of posts. However, the Department of Finance and Accounting Services (DFAS) does not change its payments until DFAS is properly notified of the FSs death. Speak with a qualified military divorce attorney if you have questions about military divorce. Life insurance is a great tool for large, short-term expenses such as paying off debt, relocating, funding educational expenses, and giving the survivor a buffer to figure out how they are going to move forward. Odom said that MOAA had brought the matter to the attention of defense officialsand staff members of House and Senate Aarmed Sservices Ccommittees. However, if your ex-wife's second (or subsequent) marriage ends by annulment, divorce, or the death of her new spouse, then her eligibility to receive pension payments may resume. My mother has suggested that she is entitled to SBP benefits, would she be? Thank you, Shellie (daughter). If you are rated as totally disabled, you may withdraw from SBP if you meet either of these two criteria: 1. The personal risk is harder to quantify, and can easily be overlooked. If not the military is there an actual insurance company that runs the annuity? What happens to all the years worth of payments I have made into the program (7 years worth) since Ive retired? I do not agree that the terms of SBP are grossly unfair. Good afternoon Ms. Horrell, x[n_"'\ }g.Ex}GD')$u>)-I;0pc;;^x\7^x.bg>|PX!OXAO9_=+^ei)VMj{jIW>o#OrnuY~^ohuo Directions are located on this webpage: https://www.dfas.mil/retiredmilitary/provide/sbp/payment.html The link to the actual form is not good, but you will have the form number to ask for assistance from the VA. Be sure you understand how the SBP-DIC offset works. Im working on a long blog post about this very topic and I thought I could just link you to it, but it is taking much longer than I expected. (There are a couple of other categories, but it doesnt sound like your friend falls into them.) The Survivor Benefit Plan allows retiring service members to allocate a portion of their retirement pay to a spouse or other eligible beneficiaries after their death. They seem to struggle with international issues. 3. Jerry, yes, you should automatically stop paying premiums when your child turns 18, if the child is not in college. of service in the Marine Corps. There are 100 reasons why that plan could be derailed, and theyre all reasons that would make you want SBP more. I wanted to repost this in hopes that Ms. Horrell might respond. SBP coverage would then be the only coverage. There are several variables that apply to your specific situation and impact the amount you receive. It also requires constant decision-making about how much to spend, finding the balance between spending enough to live will versus ensuring that you wont outlive your money. Thank you for your reply, it is much appreciated. They didnt say what was going to happen, they just asked for a copy of our marriage license and his death certificate. The new provision, which took effect on Nov. 25, fixes that problem for future retirees. You can learn more about this program at https://www.va.gov/opa/persona/dependent_survivor.asp. It isnt lost, it has paid for the coverage that youve had for the last 15 years. I tend to look at this coverage as income insurance, not life insurance. Her claim was denied because my father never set up ex-spouse SBP. Thank You for your input. You might want to double check with an experienced tax advisor to ensure that was correct. For retirees who remarry after anex-spouses death, the request must be received within one year after the date of the marriage. Jessica, this is incorrect. Which one will be off-set, and how? https://www.dfas.mil/retiredmilitary/provide/sbp/change.html. Kate, Im about to medically retire and have no dependents or former spouse. An eligible dependent child must be your unmarried legal child, under the age of 18 or under 22 if enrolled in an accredited college or university. My husband (20 yr veteran) have been married 34 years. Its not a hit on my credit. Thanks! I assume my payments into the SBP will stop. Thank you very much Kate. 2. ? If your spouse has the pension and you both choose to receive that pension as a lifetime benefit, while your spouse is alive, you might receive $1,600 a month in pension benefits. Have you reached out to DFAS for the answer to this question? Instead of throwing my hands up I am considering trying to get some kind of life coach training to be able to assist other military wives that are transitioning into retirement-it feels like it is more difficult than it needs to be and I often wish there were more people like you to turn to for questions that just dont make you want to call the assigned number, talk to a computer, be transferred ten times and annoy someone until they are finally willing to help. SBP coverage means that the non-military spouse, if she survives the retiree, gets 55% of the selected base amount of the pension for the rest of her life. With regard to the new wife, if you have been married less than a year, it might be worth getting caught up with the payments (if they will let you) and adding coverage for her. No, a spouse does not automatically inherit everything in Scotland. It is important to note that if SBP benefits are offset by DIC payments, the beneficiary may receive a refund of those premiums paid into SBP. I used to say it was absolutely right for everyone, and then I started working with some families who had enough other resources to make SBP unnecessary. Ended with an attorney that she paid 20,000. I could really use some help where to start. Im wondering if I can make a legitimate waiver request, and the best way to go about stating my case, to DFAS regarding The Barring Act, 31 U.S.C. But back pay from 12/29/2011 through 11/30/2017 would be valid. Insurable Interest Spouse: A spouse named as beneficiary must be married to the Service member on their date of NOE. Ms. Horrell, though I appreciate your consideration in my matter, I frankly would have thought it better if you had stopped yourself after the first sentence and left your personal comments out of the issue. Premiums are suspended effective the first <> I wouldnt decline SBP because you plan to invest aggressively in the future. If there is no spouse, your child or . You can also look at it as if the tax benefits are decreasing the cost of the premiums. In the meantime, you can make arrangements for your SBP premiums to be made from your VA pay using Form 2891 or you can make payments directly to the VA using the address listed on this webpage. I am a retired US Army NCO. Is there anyway that I can lose my SBP/DIC? (The numbers vary, and that is rounded.) Sir, I have no desire to convince anyone to sign up for SBP. This is usually true, but consider whether DIC will provide enough coverage for your surviving spouse and children. How do I continue to provide SBP for my spouse, or does she lose that benefit despite these years of payments. The former spouse left the U.S. shortly after the divorce and I have had no contact with nor do I even know where she is located. He was married to another lady when he originally elected to take SBP, although he says he felt forced to do it by his officers at that time without proper explanation of what it was all about. SBP payments are not reduced by any other source of income (except for Dependency and Indemnity Compensation. SBP is a monthly annuity paid by the military to the surviving spouse or, in some cases, eligible children, of a member who dies on active duty. "I would have done it even if it hadn't been for the court order. I appreciate the information on the military benefit plan. Gabriel, there are a couple of things going on here, but regardless he wont have wasted his money paying for SBP. We have been married the entire time (44years) and I know I never signed any forms giving up my right to his pension when he dies considering he was 10 years older than myself. JC, I apologize for the delay in responding. I am currently at 90% from the VA and have my payments sent to DFAS from my VA offset. I havent made any payments into SBP as I havent received retirement pay from DFAS and only disability from the VA. Im not sure if should attempt to catch up or just wait it out until I can cancel it. Many people dont like that there is no refund of premiums if the beneficiary dies before the retiree, and the only way to change that beneficiary is to remarry or have a new child (if eligible.).
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