What is the Survivor Benefit Plan (SBP)?

SBP is the DoD voluntary survivor pension program for military retirees under 10 USC §§ 1447-1455. You set aside 6.5% of your retired pay (the premium) in exchange for an annuity of 55% of the base amount that continues to your beneficiary after your death. Without SBP, your pension ends at your death — SBP fills that gap with an inflation-adjusted (CPI-W COLA) annuity.

How much does SBP cost?

For the most common election (spouse only): 6.5% × base amount. Exception: if you are on a disability retirement, on a non-regular (Guard/Reserve) retirement, or first became a member of a uniformed service before 1 March 1990, you pay the LOWER of 6.5% of the base amount or 2.5% of the DFAS threshold-amount plus 10% of the base amount above it (DoD FMR Vol 7B Ch 45 ¶3.2.1; Table 45-1 Rule 1, Note 1), so your premium may be less than 6.5%. The base amount can be anywhere from $300/month up to your full retired pay. For a $4,000 retired pay retiree electing full coverage: premium = $260/month, annuity = $2,200/month. Premium is pre-tax — at the 22% bracket, the effective net cost is roughly $203/month.

What is the paid-up rule?

Under 10 USC § 1452(j), premiums STOP when BOTH conditions are met: 360 months (30 years) of premium payments AND retiree has reached age 70. Once paid-up, no further premium is deducted but the annuity remains in force for the beneficiary's lifetime. Retiring at age 40-45 means you typically reach paid-up around age 70-75, then receive "free" coverage for life.

What changed with SBP-DIC offset in 2023?

NDAA FY20 §622 fully eliminated the SBP-DIC offset effective January 1, 2023. Surviving spouses now receive FULL SBP (taxable, with COLA) AND FULL DIC ($1,699.36/month plus dependents in 2026, tax-free) simultaneously. Pre-2023, DIC reduced SBP dollar-for-dollar, often leaving widows with $0 from SBP. The 2023 change dramatically raised SBP value for veterans with service-connected conditions.

Can I change my SBP election after retirement?

Generally no — SBP election is made at DD Form 2656 at retirement and is largely irrevocable. Exceptions: (1) one-time withdrawal window between months 25-36 post-retirement, (2) life events (marriage, divorce, child birth) within 1 year, (3) rare Open Enrollment Periods that Congress must specifically authorize — the most recent, under section 643 of PL 117-263 (NDAA FY23), ran December 23, 2022 through January 1, 2024; none is currently open (DoD FMR Vol 7B Ch 43 ¶8.1).

Is spouse signature required for SBP election?

Yes — your spouse must sign DD Form 2656 to acknowledge SBP elections less than full retired-pay base amount, OR to acknowledge no SBP at all. Without spouse signature, the default election is automatic full coverage at the full retired-pay base amount. This protects the spouse from being unknowingly excluded.

What is the annuity for an incapacitated adult child?

Under 10 USC § 1447(11) (dependent-child definition; DoD FMR Vol 7B Ch 44 ¶2.2.1.1.3), a child who is incapable of self-support due to a mental or physical incapacity existing before age 18 (or 22 if a full-time student) can remain an SBP beneficiary INDEFINITELY — not just until age 18. This is a critical SBP feature for EFMP families protecting a child with permanent disability. Document with DD Form 2656-7 and recertify periodically.

Is SBP a good deal mathematically?

It depends on longevity — run the calculator's annuity-to-premium ratio with your own numbers. The verifiable structural advantages: the premium is excluded from taxable retired pay; premiums stop permanently at 360 months of payments plus age 70 while the annuity stays in force (10 USC § 1452(j)); the annuity carries an annual COLA for the beneficiary's life; and since January 1, 2023 SBP stacks in full with tax-free DIC (NDAA FY20 §622). Decline only if you have no surviving spouse/dependent OR you have substantial alternate survivor coverage (life insurance, retirement portfolio).

SBP Premium Calculator 2026 — Survivor Benefit Plan

What SBP is

The Survivor Benefit Plan (SBP) is the DoD's voluntary survivor pension program for retiring service members. Under 10 U.S.C. §§ 1447-1455, you can elect to set aside a small percentage of your retired pay (the premium) in exchange for an annuity that pays your designated beneficiary 55% of the "base amount" each month for life after you die (a surviving spouse's annuity ends if they remarry before age 55, and is reinstated if that marriage ends — 10 U.S.C. § 1450(b); DoD FMR Vol 7B Ch 46 ¶10.2.1).

Why elect SBP? Without SBP, your military pension ENDS at your death. There is no automatic continuation to spouse or children. SBP fills this gap with an inflation-adjusted (annual CPI-W COLA) annuity that protects your family.

The 2023 game-changer: The SBP-DIC offset was fully eliminated effective January 1, 2023 under NDAA FY20 §622. Surviving spouses now receive FULL SBP AND FULL DIC simultaneously, dramatically raising SBP value for veterans who might die from a service-connected condition.

The four coverage types

Spouse only — 6.5% × base amount. By far the most common election. Premium is 6.5% of the base amount you choose (anywhere from $300/month up to your full retired pay). Annuity is 55% of that base, paid to the surviving spouse for life (the annuity terminates if the survivor remarries before age 55, and is reinstated if that marriage ends — 10 U.S.C. § 1450(b)). Note: if you are on a disability retirement, on a non-regular (Guard/Reserve) retirement, or first became a member of a uniformed service before 1 March 1990, you pay the LOWER of 6.5% of the base amount or 2.5% of the DFAS threshold-amount plus 10% of the base amount above that threshold — DoD FMR Vol 7B Ch 45 ¶3.2.1 and Table 45-1 Rule 1, Note 1. This calculator shows the flat 6.5% figure only.
Spouse + Child rider. Same 6.5% base premium plus a small additional child premium — DFAS computes the exact rate from actuarial age factors (DoD FMR Vol 7B Ch 45 ¶4.2); this tool uses a $10/month estimate — that ensures the annuity continues to dependent children if spouse predeceases retiree. Child annuity ends when youngest ages out (18, or 22 if full-time student, or for incapacitated child — see special rule below).
Child only. Cheaper, age-based premium. Annuity pays only to children, NOT spouse. Useful if you're single but want children covered.
Insurable Interest. Rare — for situations where you want to provide for someone other than a spouse or child (parent, sibling, business partner). Available at the maximum level only, so it is always based on your full gross retired pay (DoD FMR Vol 7B Ch 43 ¶2.5.3; Ch 45 ¶4.3). Premium is 10% + 5% per completed 5-year age difference (you older than beneficiary), capped at 40% of retired pay. The annuity is 55% of your gross retired pay minus the monthly insurable-interest premium in effect when you die — not 55% of a separately elected base amount (DoD FMR Vol 7B Ch 46 ¶2.1.4).

The paid-up rule

Under 10 U.S.C. § 1452(j), SBP premiums STOP when BOTH of the following are true:

You've paid premiums for 360 months (30 years), AND
You've reached age 70.

Once paid-up, no further premium is deducted from your retired pay, BUT the annuity remains in force for the beneficiary's lifetime. This is a major value driver — many retirees who started SBP at age 40-45 reach paid-up status around age 70-75 and then receive "free" coverage for the rest of their lives.

Strategic implication: Retiring at a young age and electing SBP is a great deal. Retiring later at age 55+ means you may never reach paid-up, but premium amounts are still small relative to the annuity value.

Election decision — at retirement only

SBP election is made at the time of retirement processing (DD Form 2656). Once you separate, the election is generally irrevocable EXCEPT:

One-time withdrawal window (months 25-36 post-retirement): You can discontinue SBP during the 1-year period that begins on the second anniversary of retired-pay commencement, using DD Form 2656-2. A married participant needs the spouse's written concurrence, and no premiums already paid are refunded (DoD FMR Vol 7B Ch 43 ¶¶7.1.1-7.1.7).
Life event changes: A newly acquired spouse or a newly acquired child — you must make the election within 1 year of acquiring that family member (DoD FMR Vol 7B Ch 43 ¶6.1). A child simply reaching age 18 is NOT an election event; coverage and premium adjust on their own.
Open Enrollment Periods: There is no regular recurring open season — each must be specifically prescribed by law. The most recent, authorized by section 643 of Public Law 117-263 (NDAA FY23), ran December 23, 2022 through January 1, 2024 and let eligible members enroll or discontinue (DoD FMR Vol 7B Ch 43 ¶8.1). No open season is currently authorized.
Spouse death: Suspends the premium. If you remarry, spouse coverage resumes automatically at the first anniversary of the marriage unless you elect within that year not to cover the new spouse (DoD FMR Vol 7B Ch 43 ¶6.1.1).

Spouse concurrence is required. If you are married, your spouse must sign DD Form 2656 to concur with any election less than full spouse coverage at the full retired-pay base amount — including declining SBP entirely (10 U.S.C. § 1448(a)(3)). Without that concurrence, the default is automatic full coverage.

SBP-DIC offset elimination — the biggest 2023 change

Prior law: If a service-connected veteran died and surviving spouse received VA Dependency and Indemnity Compensation (DIC), the SBP annuity was reduced dollar-for-dollar by the DIC amount. Many widows received effectively $0 in SBP because DIC covered or exceeded the SBP base annuity.

Current law (NDAA FY20 §622, phased in 2021-2023): The SBP-DIC offset is FULLY ELIMINATED as of January 1, 2023. Surviving spouses now receive:

FULL SBP annuity (55% of base amount, taxable, with COLA)
FULL DIC ($1,699.36/month plus dependent add-ons in 2026, tax-free)

Why this matters for elections: If you have a service-connected condition or plan to file VA disability, SBP is now a much more valuable election. Pre-2023, SBP could be redundant for some veterans. Post-2023, SBP and DIC stack — they're complementary, not duplicative.

Tax treatment

Premium: Excluded from retired pay before federal tax is calculated. So premium is effectively pre-tax — at the 22% bracket, a $260/month premium reduces retired pay by $260 but reduces taxable retired pay by $260, saving $57 in federal tax. Effective net cost: $203/month.
Annuity: Taxable to beneficiary as ordinary income, reported on Form 1099-R. It is not counted under the Social Security earnings test — that test counts only the survivor's own wages and net earnings from self-employment (42 U.S.C. § 403(f)(5)(A)), so an SBP annuity never reduces a survivor's Social Security benefit. Because it is taxable, however, it raises "combined income" and can make more of a survivor's Social Security benefits taxable (26 U.S.C. § 86).
Social Security offset (repealed): Before April 1, 2008, an SBP annuity could be reduced based on the widow's or widower's Social Security entitlement. That offset was eliminated effective April 1, 2008 (DoD FMR Vol 7B Ch 42 ¶4.17) — the annuity now stays at the flat 55% for life.
DIC (different program): Tax-free to beneficiary. Stacks with SBP after 2023.
State tax: Varies; some states tax retirement pay (and thus SBP annuity) while others fully exempt.

Special rule: incapacitated adult child

Under 10 U.S.C. § 1447(11) (dependent-child definition; DoD FMR Vol 7B Ch 44 ¶2.2.1.1.3), a child who is incapable of self-support due to a mental or physical incapacity that existed before the child's 18th birthday (or was incurred before age 22 while pursuing a full-time course of study) can remain an SBP beneficiary INDEFINITELY — not just until age 18.

This is a critical SBP feature for EFMP families with a child who has a permanent disability. The annuity protects the child's lifetime financial security after both parents have passed. Document the disability with DD Form 2656-7 (Verification for Survivor Annuity) and maintain certification through DFAS.

SBP Premium Calculator