I retire in a few weeks and im still torn on this.



What is your opinion of the SBP? better options?



Thanks

Free

I passed on it due to the cost. I figured it was cheaper to just buy a ton of life insurance to provide for my wife when I die. I do not regret the decision. Have you taken your retirement/VA physical? I highly encourage you to ask questions when filling out the forms and to claim every physical issue you have. Trust me things that seem like a minor problem now will be kicking your ass later in life. I also was an Infantryman. Thanks for your service and welcome to the life of military retiree.

Look at what it provides and how much you have to pay for it.  If your spouse is significantly younger than you and you think they're going to outlive you by a significant margin, maybe it's worth it.  Otherwise, it never made much sense to me, but it also depends on your financial situation.

Not retired yet, I'm over 20, I've been through TGPS a couple of times and still weighing options.

This.  Our financial advisor recommended about $500k in life insurance, that's still cheaper than SBP, AND provides roughly the same coverage, AND the premiums don't go up, AND the policy earns equity, AND it's not subject to the vagaries of Congress.  I'm concerned because the men in my family live to about 70, the women in my wife's family live to their 90s, so I fully understand your concerns.

Also, if you entered service before 1 Feb 1990, you qualify for a reduced SBP option, which we did take.  So for $43/mo, Mrs Limaxray gets something like $150/mo when I pass.  

Go talk to the First Command guys near you.  They were the ones that worked all this out for us, about two months before my retirement date.

SBP is a bad deal for the reasons mentioned.  Stay far away from First Command as well.  

https://www.sec.gov/news/press/2004-170.htm

Edit to add:

https://docs.justia.com/cases/federal/district-courts/california/casdce/3:2005cv00179/83116/272

Eh, I used them when they were USPA/IRA, they have some pretty good tools for retirement planning, and they understand the .mil retirement system better than anyone other than USAA.  Not a fan of their investment options, but you also have to give affirmative consent on their recommendations, so it's not like you HAVE to do what they recomend.  Their models work pretty good to give you a go/no go decision on SBP.

If you have minor children definitely get it for them. It's only a few bucks.

I got it for my son when I retired and a big life insurance policy with my wife as the beneficiary that pays out lump sum as it made better financial sense in our case.

If you're not insurable, look at SGLI conversion to VGLI.

Whatever you do, make sure your family is well taken care of if something happens to you.  

My retired buddy just passed away totally unexpected of natural causes at 51 yrs of age.

Years ago I went to Career Counselor school.  We had a VA guy come talk about benefits.  He mentioned that when you retire from active duty your pay isn't technically "retirement."  I forget what he called it, but he said that your actual "retirement" comes at age 60.  

The way he explained it, if you decline SBP at your end of service, you get one last chance to apply for it when you turn 60.  

Please don't take my word on this.  It is worth the time to call the DFAS people and talk to an actual SBP expert.

Don't forget that we are talking about your spouse getting your pension after you die, which is different from life insurance.  Your life insurance should be at least 10 times your net income.  The philosophy is that if it's invested wisely and earns 10% interest, then you effectively replace your income with that interest.  This should sustain your spouse/family in addition to your SBP pension benefit.

He's correct, you're getting retainer pay as a member of the fleet reserve until 30 years from your ADSD, and then you shift over to the retired rolls.  I'm not certain if the other services do it that way, but the Navy does.

Retainer pay is what it truly is because we can be called back.  If you die you can't be called back so it ends.

The problem with SBP is you're going to pay 6.5% of your monthly retired pay to get only 55% of your monthly retired pay to your spouse if you die.

Most can do way better with a big lump sum insurance policy that costs less monthly then SBP does.

Let's say your retired pay is $3000 so full SBP for spouse would cost $195 a month to get your spouse a payment of $1650 per month if you die.

Now let's say you purchase $500,000 term life at $195 per month (just for ease of comparison, realistically most would pay much less).  

Term pays out lump sum $500,000 immediately upon your death.  

SBP pays out $1650 per month upon your death and 25 years later (if they live that long) your spouse will finally reach $500,000.

$500,000 lump can pay off a mortgage, or cars, put kids through college or provide the same $1650 per month for 25 years while making some modest interest in a safe secure investment. It gives your family way more options.

$1650 month isn't paying off anything immediately except maybe part of your spouses monthly bills.  

Full SBP for kids is a few dollars a month to get the same $1650 a month until they are 18 or 22 if they are full time students.

Everyone's circumstances are different so crunch the numbers and if you go with life insurance make sure the policy is active before you have to decide to take SBP or not.  

Whatever you do make sure your family is taken care of if you pass.

I had the same choice recently as I retired this past year. If you are in decent health, height/weight proportionate, you can get a 30yr $1 million policy for a tiny fraction of the cost of SBP. I have used USAA and Navy Mutual with 1mil policies with each in addition to the max VGLI. They (USAA/Navy Mutual) send a nurse to your house or place of work to do a 45min checkup and labs. The cost is less than 100 a month for each policy. My spouse has the same policies minus SBP.

While perhaps this is overkill for most, I have peace of mind and I am financially ahead of where I would be with the SBP instead. This provides a more efficient means to provide benefits for my family in the event of death. Should your spouse die before you, the premiums paid into SBP would be gone with nothing to show.

I have both.
Wife is young and I'll probably die sooner than later.
$800k in life insurance will pay off mortgage and set them up for a while.
As long as she stays in this house she won't have to pay property tax.
SBP will pay her monthly expenses.

Virginia and VA will both pay for my kids to go to college in any VA state school because of my rating.

I told her not to remarry after I'm gone because she'll lose benefits for 30 years or so.
She knows enough stories about guys marring widows and taking the stuff the original dude worked for.

SBP made financial sense for me at retirement 5 years ago. I have a younger wife and 5 kids still at home. I bought the extra coverage/share for my kids for a few extra bucks a month. It worked out much cheaper for me than life insurance. Your life situation may vary.