Category Archives: sbp

Term Life Insurance Vs. Survivor Benefit Plan—A Side By Side Comparison

Posted on April 4, 2016 by Forrest Baumhover

You might wonder why I wrote an article that seemed to advocate SBP, then followed it up with an article that seemed like SBP-bashing. I did so for two reasons. First, both articles seek to provoke critical thinking…I think I soundly met that objective. Second, putting those two articles side by side shows my true focus…when you’re looking at your decision to retire from the military, you need to make sure you address SBP properly. After all, if you make the wrong decision, you’re stuck with it. With that said, I got hit up on both sides of the debate. Continue reading →

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Weekend Wrap-up: Military Personal Finance Articles You Should Read (3/25-3/31)

Posted on April 1, 2016 by Forrest Baumhover

To round out the personal finance section, we have a side-by-side comparison of Roth vs. traditional IRAs (hint: the difference has a lot to do with before retirement tax rate vs. after retirement tax rate, as well as the length of contribution period). Also, FI Guide has a guide for those of you looking at post-military employment where HSAs are relevant. We have 4 ways to tell if you’re financially ready for retirement. If you’re looking for a new car, you might be interested in this Consumer Reports list of the 10 worst cars on the road. Finally, Claire Emory presents the perils of relying upon an inheritance before you actually receive it. Continue reading →

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Why You Should Strongly Consider Not Participating in the Survivor Benefit Plan

Posted on March 16, 2016 by Forrest Baumhover

 I am currently writing an ebook about the Survivor Benefit Plan, which I plan to release by summer.  If you’d like to receive updates, please send me an email or join Military in Transition on Facebook. Previously, I wrote about … Continue reading →

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What is the Survivor Benefit Plan, and What Does It Mean to Me?

Posted on January 11, 2016 by Forrest Baumhover

When a military retiree passes away, their pension automatically stops. Without a plan to replace this lost income, the family’s quality of life could definitely be at risk. In 1972, Congress established the Survivor Benefit Plan (SBP) and its reserve counterpart under Title 10, specifically to help military retirees and their families protect themselves from the risk of financial loss.

SBP and its reserve component counterpart, RC-SBP, are annuity plans designed to replace a military pension once a military retiree passes. Under SBP, you pay a certain percentage of your retired pay (currently capped at 6.5%) in exchange for the right for your dependents to receive 55 percent of your retirement pay. For example, if you have $1,000 per month in retired pay, you’d pay $65 per month for SBP. When you die, your spouse would receive $550 per month. After 360 months and you reach the age of 70, you are considered ‘paid up’ and there is no additional cost to you.

Here are four unpublished reasons you should strongly consider SBP: Continue reading →

Posted in military, military financial planning, military pension, military retirement, military transition, pension, retirement, sbp, survivor benefit plan, transition, westchase financial planning | 2 Comments