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How the Survivor Benefit Plan (SBP) works — electing coverage at retirement, what it costs, and what your spouse receives

Military retired pay stops when the retiree dies. The Survivor Benefit Plan (SBP, 10 USC 1447–1455) lets a retiring service member convert part of that pay into a lifetime, inflation-adjusted monthly annuity for a spouse, former spouse or dependent children. The annuity is 55% of the base amount the retiree elects (full gross retired pay or a reduced amount); the premium is at most 6.5% of the base amount, deducted pre-tax from retired pay. The election is made on DD Form 2656 before the retirement date, and a married member needs the spouse's notarized concurrence to decline coverage, elect less than full spouse coverage, or cover children only. Since January 1, 2023 the SBP-DIC offset is gone: a surviving spouse receives the full SBP annuity and full VA Dependency and Indemnity Compensation.

Time required: PT2H (counseling and election) + premiums during retirement until paid-up Outcome: A lifetime 55%-of-base-amount annuity for your spouse (or an annuity for eligible children)

If you're in crisis: Call 988 + Press 1 for the Veterans Crisis Line — 24/7, free, confidential. Spanish operators available 24/7. Text 838255. Filing claims can wait; your safety cannot.

What you'll need

DD Form 2656 (Data for Payment of Retired Personnel) — SBP election section, signed and witnessed before your retirement date
Spouse's notarized signature on the form if you elect anything less than full spouse coverage
DD Form 2656-5 (RCSBP election) if you are a reservist receiving your 20-year letter
DD Form 2656-6 (election change) to add a spouse or child acquired after retirement; DD Form 2656-2 to end coverage in the third year
DD Form 2891 to have premiums deducted from VA compensation when the VA offset leaves no retired pay

Step-by-step

Step 1: Understand what SBP pays and costs

SBP pays an eligible beneficiary 55% of the elected base amount for life (a spouse's annuity is suspended if they remarry before 55; children are paid until 18, or 22 while in school full time, and incapacitated children indefinitely). The annuity rises each December with the cost-of-living adjustment. The premium is at most 6.5% of the base amount — $65 a month on a $1,000 base, $45.50 on a $700 base — deducted from retired pay before federal income tax; there is no cost while on active duty. Adding children to spouse coverage costs a little more, based on ages. Natural-interest-person coverage (anyone other than a spouse or child) costs 10%–40% of retired pay.

Reference: https://www.dfas.mil/RetiredMilitary/provide/sbp/cost/

Step 2: Make the election on DD Form 2656 before your retirement date

Get counseling from your branch's retirement services office, then complete the SBP section of DD Form 2656. You must sign before your retirement date, your witness must sign the same day, and if your spouse's signature is required it must be dated on or after yours — also before the retirement date — and notarized the same day it is signed. Under 10 USC 1448(a)(3), a married member cannot decline SBP, elect spouse coverage at less than the maximum, or elect child-only coverage without the spouse's concurrence. If DFAS receives no valid election, the law starts automatic full spouse-only coverage and charges the premium.

Reference: https://www.dfas.mil/RetiredMilitary/provide/sbp/enroll/

Step 3: Reservists — elect RCSBP when the 20-year letter arrives

Reserve and Guard members decide at the 20-year Notice of Eligibility, not at 60. You have 90 days from the notice to file DD Form 2656-5: Option A defers the decision until you reach retired-pay age (no annuity if you die before then), Option B gives coverage with the annuity starting on the date you would have reached retired-pay age, and Option C gives immediate coverage. If no election is received in 90 days, the law automatically enrolls you in Option C. Spouse concurrence, notarized, is required for A or B.

Reference: https://www.dfas.mil/RetiredMilitary/provide/rcsbp/

Step 4: Changing or ending coverage later

If you had no eligible beneficiary at retirement and later marry or have a child, you have one year from the marriage or birth to add coverage with DD Form 2656-6 (upload through askDFAS, fax 800-469-6559, or mail DFAS – U.S. Military Retired Pay, 8899 E 56th Street, Indianapolis, IN 46249-1200). If you had eligible beneficiaries at retirement and declined, you cannot add them or a later spouse. You may cancel SBP only in the 25th through 36th month of retirement, with spouse concurrence (DD Form 2656-2). A retiree rated totally disabled by VA for 10 continuous years (or 5 continuous years right after active duty) may withdraw with the beneficiary's written consent; the premiums paid are refunded to the surviving spouse after the retiree's death. Premiums stop once you have paid for 360 months and reached age 70 (paid-up SBP, 10 USC 1452(j)).

Reference: https://www.dfas.mil/RetiredMilitary/provide/sbp/change/

Step 5: SBP and VA DIC together — and what survivors do

Before 2023 a spouse's SBP was reduced by VA Dependency and Indemnity Compensation (DIC). The FY2020 National Defense Authorization Act phased that offset out, and it was fully eliminated on January 1, 2023; surviving spouses now receive the full SBP annuity from DFAS and full DIC from VA (base DIC rate $1,699.36 a month effective December 1, 2025). If the VA offset leaves you with no retired pay, keep SBP in force by having premiums deducted from VA compensation (DD Form 2891) or from CRSC. When the retiree dies, the survivor reports the death to DFAS Retired & Annuitant Pay at 800-321-1080 and starts the annuity through the "Start an SBP Annuity" process; DIC is a separate VA claim (VA Form 21P-534EZ).

Reference: https://www.dfas.mil/RetiredMilitary/survivors/Understanding-SBP-DIC-SSIA/

Critical tips

The decision at retirement is nearly permanent: declining with an eligible spouse means that spouse — and any future spouse — can never be covered.
A spouse can refuse to sign the concurrence, which leaves full spouse coverage in place.
Divorce: a former spouse can be covered by court order or voluntarily; the election (or the former spouse's own "deemed election") must be filed within one year of the decree.
Congress authorized a one-time SBP open season in the FY2023 NDAA (December 23, 2022 to January 1, 2024). No open season is currently in effect, and none is scheduled.
Questions: DFAS Retired & Annuitant Pay, 800-321-1080, Mon–Fri 8:30 a.m.–4:30 p.m. ET.
A county veterans service officer can help a survivor with the DIC claim for free: warriorsfund.org/find-cvso.
In crisis: dial 988 then press 1, or text 838255.

Free claim help is the highest-leverage starting point. County Veterans Service Officers (CVSOs), VFW, American Legion, DAV, and AMVETS offer FREE claim help, typically through VA-accredited representatives (accreditation is per person; ask whether the person helping you is VA-accredited). Find a free CVSO → · Support Wounded Warriors EIN 86-1336741 →

Related resources

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