Part 2: How to Calculate your Survivor Benefit Plan (SBP) Premium

The program I’m about to share with you is designed to help you make an informed decision about whether or not you want to opt out of the SBP. I say opt out because you will be automatically enrolled if the Defense Finance Accounting Service (DFAS) doesn’t receive you DD Form 2656.

You can find the tool here Office Of The Actuary, U.S. Department Of Defense.

You will want to click on SPB Premium hyper link and it will download an excel file for you to start. For this example I will be using the information on a hypothetical individual from my Part 1 post.

PART 1

In the retiree information tab. You will fill the information that pertains to you. But, for my example I’ll use the information from my Part 1 post. Which is a CWO4 with 23 years of service at retirement. This will be the for the selected coverage for a Spouse. An expected monthly base amount at retirement of $4,465 a month. See example of this filled in below:

Once your information has been completed you will then click on the premium tab at the bottom of the excel file to see the results.

PART 2

Here are the results for my example. SBP Premium and Annuities cost per month will $290.23 for 360 months. Your spouse’s monthly SPB annuity will be $2,455.75 per month, for life.

The result you see above is for this example is 55% of the monthly pension of $4,465.00 for a CWO4 at 23 years of service at retirement. Take note of the blue portion. Premiums and annuities are estimates. Actual premiums and annuities are set by DFAS. Above are costs and benefits for 2023 only. Thereafter, all numbers will generally increase by a cost-of-living factor each year.

So, if you are eligible for retirement. I highly recommend you go to this site and download this excel file within two years of retirement. It can give you an indication of what the premium you’ll be paying.

Part 3 is next, I’ll address the probability that your spouse will receive SBP benefits, i.e., the probability you will pre-decease your spouse.

If you have any questions, feel free to send me a quick message on LinkedIn, or comment on my Medium blog.

Disclaimer: The views and opinions presented herein are those of the author and do not necessarily represent the views of DoD or its Components. Appearance of, or reference to, any commercial products or services does not constitute DoD endorsement of those products or services. The appearance of external hyperlinks does not constitute DoD endorsement of the linked websites, or the information, products or services therein.