What the Survivor Benefit Plan costs, what it pays, and when it pays for itself
You elect a base amount. Everything flows from it. At retirement you choose a base amount anywhere from $300 a month up to your full gross retired pay. You pay 6.5% of it every month. Your survivor receives 55% of it every month for the rest of their life. Both numbers rise with the retired pay COLA, so the protection does not erode.
The premium is pre-tax, so the sticker overstates the cost. Premiums are withheld from gross retired pay before federal income tax, which means they reduce your taxable income. A retiree in the 22% bracket paying a $325 gross premium actually feels about $253.50. That is a meaningful discount the brief never mentions.
Premiums are not forever. They stop once you have paid 360 months of premiums and reached age 70. Retire at 40 and you are paid up at 70. Retire at 45 and you are paid up at 75, because the 360 months finish later than your 70th birthday. Coverage then continues for life at no further cost. Months in which you have no eligible beneficiary do not count toward the 360.
The widow's tax is gone. The old SBP-DIC offset reduced the annuity dollar for dollar by any VA Dependency and Indemnity Compensation the survivor received. Congress repealed it in the FY2020 defense bill, it phased out through 2021 and 2022, and it was fully eliminated on January 1, 2023. Your spouse now collects the full SBP annuity and full DIC at the same time. If you carry a service-connected condition that could contribute to your death, that change materially improved the value of electing SBP.
No one can be turned down. There is no medical exam and no health underwriting. For a retiring member whose medical record would make private coverage expensive or impossible, that is the entire argument, the same way guaranteed issue is the argument for VGLI.
And the honest downside. SBP only pays if you die first. If your spouse predeceases you, premiums stop, but nothing is refunded and no benefit is ever paid. The election is effectively irrevocable outside a narrow withdrawal window in the 25th through 36th month after retirement, which requires your spouse's concurrence. It replaces 55%, not all, of the base amount. And the annuity is taxable to your survivor.
6.5% of the base amount you elect, for standard spouse coverage, withheld pre-tax from your retired pay. On a $5,000 base amount that is a $325 gross premium, which a retiree in the 22% bracket feels as roughly $253.50.
55% of the base amount, monthly, for life, adjusted every year by the retired pay COLA. On a $5,000 base amount that is $2,750 a month. It is taxable income to them.
When you have paid 360 months of premiums and you have reached age 70, both conditions, not either. Retire at 40, paid up at 70. Retire at 50, paid up at 80. Coverage continues for life afterward at no cost.
About 42.5 months of annuity recovers a full 360 months of premiums, in today's dollars. That is roughly three and a half years. Every $1 of monthly premium buys about $8.46 of monthly annuity. The ratio does not depend on the COLA, because both sides ride the same one.
Not anymore. The offset was repealed and fully eliminated as of January 1, 2023. Your spouse receives both in full. Our Survivor Benefits Calculator has the current DIC figure.
Only between the 25th and 36th month after retirement, with your spouse's written concurrence. No premiums are refunded and coverage ends immediately. Outside that window the election is generally permanent, which is why it deserves an evening with a calculator rather than a signature at the out-processing desk.
SBP coverage is provided at no cost. Members who die on active duty are generally treated as having retired with full disability and elected full coverage that day. Nothing on this page is required for that. See the Survivor Benefits Calculator for the full death-in-service picture.
All data on this page comes from official government sources. Verify independently:
📎 Survivor Benefit Plan (DFAS)📎 SBP-DIC Offset Elimination (DFAS)📎 CRS Report R45325 (SBP Background)📎 SBP Fact Sheet (myArmyBenefits)📍 This is an estimate. Talk to a Retirement Services Officer before you sign the DD-2656. It is free.
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