Simple math shows that by putting that money is a savings account earning 2%, my spouse would earn $2000/mon with the exception that she also has $1,000,000 in the bank. 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. I did some further digging into the matter after I asked here. This topic is dear to my heart, and I love to help people understand it better. Im 50% from the Marine Corps. Im looking up some information and it might take a little time. If your beneficiary was your spouse, and you remarry, you may add a new spouse to your SBP within one year of remarriage. You may choose to purchase or not purchase. Do you know if back in 1982 this was still the case that the nonmilitary spouse had to sign to not participate or could the retiree make the election without the consent of the spouse? It is a very simple process and folks do it all the time when they receive a lump sum of taxable income. You can opt-out of SBP between the 24th and 35th premium payment, but you will never be able to opt back in (unless there is an extraordinary situation and there is an open enrollment period. Make up a chart that reflects the earnings of a surviving spouse of an E7 with 22years. My child is the beneficiary, when my child turns 18 and not in college do I get to stop paying SBP payments? My husband a veteran died 20 years ago. My husband never discussed pension amount or anything of the sort when he retired. By Carl O. Graham. Hi! This is usually true, but consider whether DIC will provide enough coverage for your surviving spouse and children. 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 annuity for the surviving spouse can be reinstated if the remarriage ends. Unlike some other military benefits, only one spouse/former spouse may be covered by SBP at any time, and there are a web of rules regarding changes. Faith, let me see if I am understanding your question. The tax levy is not part of the SBP laws but results from individual tax treaties between the U.S. government and various foreign countries. No one changed the rules mid-way through the game. Excuse my ignorance but my father recently passes away and had SBP. Especially the United States DOD. He received benefits at age 60 he is now 73. The content on this site should not be considered professional financial or legal advice. I know people who have received benefits when their spouse died within the first year after retirement. SBP benefits are tied to the beneficiary. I read through the comment section. (The numbers vary, and that is rounded.) DFAS told me that it is listed all the time in the ECHOES publication and that he should have known to do that. We were told at the 5 year mark to call and let them know to stop taking payments out because it had been 5 years. Others: Service members who do not have a spouse or children may elect SBP coverage for people who have an insurable interest. This is limited to one individual family member or non-family member who falls within certain criteria. https://paycheck-chronicles.military.com/2017/02/01/mailbag-veterans-services-officers/, Yeap! Ive written I think everything there is to know in this article: https://www.katehorrell.com/understanding-sbp-dic-offset/ In it, Ive listed three good reasons why you would want to keep SBP even if you are guaranteed DIC: The SSIA entitlement, the possibility that the offset will be eliminated, and the fact that SBP is often more than DIC. If your mother does not have a MyPay account, I suggest that you help her establish one. SBP premiums are deducted from retired military pay pre-tax, which reduces the overall cost of the premiums. SBP coverage would then be the only coverage. What would happen if they do not pay the 360 months? Ann, this is beyond my level of knowledge, but here are my thoughts: Former spouse SBP coverage wasnt even an option until 1982, so it wouldnt have been included in their divorce. I was told that my Father had not informed DFAS of my Mothers passing in 2006 as he was suppose to do. It will make a tremendous difference to them," he said. If the survivor is eligible for DIC, the amount of their SBP will be reduced by the amount of DIC that they receive. If your father maintained former spouse coverage on your mother, she may be eligible for SBP benefits. I will have been paying into the child only SBP for 15 years by then. Keep in mind that this premium is paid pre-tax, so the net effective cost is lower. My husband retired in 1993 and I pulled out all of his retirement papers and and there is no forms with my signature on anything giving up my rights to SBP or form of any sort to SBP. And this all happened a long time ago. If an annuity is the right tool for your income planning needs, the price for SBP can not be beat. I have no idea why. If you choose to replace SBP with life insurance, be sure to have a plan for how those insurance proceeds will be invested in a way that deals with how quickly inflation can erode the purchasing power of a dollar, and also a plan for how your beneficiaries can be assured of not out-living the proceeds from the insurance policy. The only conversation I remember is someone sold him a VGLI which at the time was less than 6.5% SBP premium he would have paid. Longevity risk presents two problems: spending too much, or spending too little. My wife is 10 years younger than I am. Former Spouse-and-Child (ren) 6. From the 25th to 36th month of coverage, you can terminate your SBP election. He is fighting the SBP situation because he paid the full amount and now has been fighting for 6 yrs. There is also a little counter at the bottom of the RAS that shows how many months of premiums have been paid. The retirement officer never explained that. If you click on an advertisement or link, I may be compensated. 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. My mother never received notice of her entitlement for RCSBP (could be they sent notice to an old address) and never knew she was entitled to it and neither did I until I read about it online recently. I hope you are satisfied with the resolution. SBP is for when the survivor lives a lot longer than you planned.. Heck, you could die in the first month of retirement and theyd be fully covered. I was deemed 100% P&T for one injury, but have many others die to combat. There are several reasons why you might want to continue having SBP coverage even if your husband is 100% disabled, including the Special Survivors Indemnity Allowance (SSIA), if the SBP benefit is larger than the DIC benefit, etc. There is no refund of premiums. So my sisters and I received a refund of the SBP between 2018 and 2012 (6 years of limitations) but DFAS will not refund 2012-2007. We were informed we qualified for a premium refund but they did not give us a time frame of when to expect it. If you elected the full SBP, the benefit is 55% of your retirement pay. I am so confused, please help. My youngest attends college full time and will turn 22 in 2 months(december). As you are 100% P&T, you will have more windows to withdraw from SBP than the average retiree. Please review this FAQ to see if your question has already been addressed, or visit NCA's helpful FAQ list here. (Theres a whole book in that statement, so be sure that you thoroughly understand the taxability of the proceeds of any insurance policy you purchase.) Hi Kate, I retired at 62 three years ago and may not live until 92 if I die as I understand your previous post, my wife will receive the SBP payment even though it is not paid in full. 2.5% of the first $635 ($15.88), plus 10% of the remaining covered amount. There is no health examination or medical underwriting for SBP coverage. If I do enroll her in the first week when will her SBP coverage commence? . Thank you, Shellie (daughter). worked for 30 years in the Marine. 4. Good evening Kate, SBP is not the right tool for every situation. "Your surviving spouse may remarry after age 55 and continue to receive SBP payments for life. They were mailed annually or whenever there was a change in pay. 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. One downside to SBP coverage is that you do not have the choice whether to pay premiums with pre-tax or post-tax money. Second, survivors who are affected by the SBP-DIC offset are eligible for a $310 month allowance called the Special Survivors Indemnity Allowance (SSIA). endobj
Most people are paying SBP premiums into their 80s, and 90 is not uncommon for reservists. I tend to look at this coverage as income insurance, not life insurance. Many people miss that window to reinstate coverage. I learned this the hard way and wasted 2+ years of struggle (and tens of thousands of dollars) before I found out about the Estoppel problem. This wild assumption sounds like advice from a 4 year old. Kate, Just received word on this issue. If not, what other sources of income do you see for them? DFAS said that, because the benefit would henceforth be considered part of the ex-spouse's property, the benefit "expired" if the ex-spouse died. Great question! I did not elect the SPB because I thought the program was borderline criminal. I have not contacted them for an appeal because I feel that there is no way to prove that my father didnt know to contact regarding the situation. Im 61 years old and I plan to retire from active duty in December 2018. It was only for my kids, and when I signed up for it I had no clue what I was doing. I most definitely want her to have that protection, particularly given my life expectancy. Does that make sense? 3. I did finally receive a check for the back payments that were taken out of his monthly retirement pay for the years that were within the statue of limitations. 2. I have appealed that decision of DFAS denial back in January of 2019 and still waiting to see what happens. Also, a Veterans Service Officer might be able to track down more details. Whatever is remaining DFAS will send to her in a lump sum amount. I raised him as single parent throughout career. I strongly advise to NOT waste one nickel on an SBP. Angelika, Im afraid Im not sure what youre explaining. Mom received DIC after 3 years. After a week Defas sent a letter saying she may have to pay it all back to SBP. I dont blame them though because even though its their job, I know they have a lot on their plate and tend to where many hats. Is that a correct assumption? My spouse and I are separating and as part of the agreement we are working through I wanted to ensure that her share of retired pay was retained. For long-term income, there are a couple of significant risks to using a lump-sum payout. 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. If you elect SBP coverage, your beneficiaries are fully covered as soon as you retire. The law requiring spouses to agree to waive SBP was enacted in 1986, so you should have been asked to sign for anything less than full SBP. A spouse may Thank you, Shellie. Frankly, I think he may have been unaware. Once the dust settles, I understand I will receive reduced SBP, full DIC, and SSIA. The age 70 and 360 month is just the paid-up cut-off, after which no more premiums are required. Because DIC benefits are non-taxable, the net income is higher than if just SBP were received. Jeff, are you asking about repaying that deficit now or how that deficit will impact annuity payments made to your survivors? That depends on your situation. There is no minimum time or number of payments required for benefits to be paid. My parents divorced in 1985. Ill let you know what I find out. 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. Your mother should change her income tax withholding via the online MyPay system or by physically mailing an IRS Form W-4P (available at https://www.irs.gov/pub/irs-pdf/fw4p.pdf) to DFAS at Defense Finance and Accounting Service, U.S. Military Annuitant Pay, 8899 E 56th Street, Indianapolis, IN 46249-1300. Who can I contact to try and help Dad. I have never understood this perspective perhaps you can help me? <>
It allows for an extra payment each month that fills in some (or all) of amount that it is offset. She can apply to find out if it happened. 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. What happens to all the years worth of payments I have made into the program (7 years worth) since Ive retired? He was in the service for 27 years and retired in 1977. section 3702 regarding SBP payment of any claim not received within 6 years from the date it accrues basically a claim for Arrears of Pay. 1-Spouse: The surviving spouse is the beneficiary of RCSBP upon the death of the Soldier/Retiree. SPB was stopped once she remarried and my husband obtained her marriage license. The next question is, what in your plan provides for income for your survivors? The benefit drops from 55% to 35% assuming the spouse elects to receive social security. He was married before during most of his time in service. 2. If your current investments are enough to make SBP unnecessary, great. 10+ Places To Learn About The Survivor Benefit Plan. I am military retiree (24 years service) entered service 1971 and I was medically retiree with a 60 percent disability . I am married to a non US citizen and he is my beneficiary for the SBP. The family member may be a the only eligible child of the service member (elected in lieu of child coverage), or it may be the adult non-dependent child, parent, step-parent, sibling, grandchild, niece, nephew, aunt, uncle or cousin. (And remarkably cheaply, at that.) Children: Children may be covered in conjunction with Spouse or Former Spouse Coverage, or they may be covered alone in the Children Only category. If you are the beneficiary, and you die, the payments will end. Good luck with trying to find a site that furnishes all the information. Other contributors to that bucket might include any other pensions from the spouses employment or the service members second career, income provided by TSP, 401(k)s or 403(b)s, life insurance or other annuities, Individual Retirement Arrangements, real estate, and other income-producing assets. I understand payback for dollar for dollar. Tony, please accept my condolences on the loss of your parents. Odom said the fact that DFAS made no public notice of the policy change rankled retirees, advocacy groups and some lawmakers. The requirement for SBP to be paid in full is 360 payments AND reaching age 70. This information remains here for those transition years and for reference. In the 2018 National Defense Authorization Act, the SSIA rate was set at $310 per month for 2018, and was made permanent. But dont count on what your investments will do in the future. Another question: my wife is ~8 years older than I. 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