My spouse would continue to have health insurance until/if she remarries. My son would have health insurance until he ages out which would be around the time he completes college. To answer your other question, you are correct. If I turn down the survivor benefit plan now, I won’t get another opportunity to purchase it.If the survivor pension is turned down, will surviving spouse and child be able to still get military health insurance if you pass on, or would it have to be paid at a different (perhaps increased) price out of pocket?Hi, everyone. Need your help on a decision I will need to make in the coming weeks. I’m in the military and I’m scheduled to retire this year. My pension will be about $5345 a month going forward, but stops upon my death. I have an option to buy a Survivor Benefit Plan (SBP) through the military for my spouse. The plan costs 6.5% of my military pension pre-tax, so I can expect to pay around $347 a month as of today. This amount will increase as my military pension increases equating to 6.5% of my pension. As a result of purchasing the plan, my wife would receive 55% of my pension ($2940) as of today. These premiums are paid for 30 years. The premiums stop, if DW passes away before me or in the event of a divorce. I’m trying to decide whether I should purchase the plan and could really use your feedback. Below is some other pertinent info which might be helpful.
-DW 47 yrs old, DH-44 yrs old, DS-14 yrs old
-As of today, we’ve saved 24 times our desired spending for retirement. This amount is the sum of what’s in our 401k, TSP, IRAs and various taxable accounts. This amount doesn’t include my pension. The only debt we have is a mortgage with a balance of $410k at 2.25% with 17 years remaining. The house is worth $1.1 mil. DS’s undergraduate and graduate education is funded as DH transferred his GI Bill benefits to DS (3 years worth of benefits). Also, we’ve funded a 529 plan with around $120k.
-As of today, DH has 4 different term life insurance policies totaling $2.3 million. All 4 expire between DH’s age 60 and age 68 year. We have an $800k policy on DW which expires at age 67.
-Upon retiring from the military this year, DH has decided he likely won’t re-enter the workplace at all. DW has a desire to retire in 2026.
-DH has the option to purchase the Survivor Benefit Plan today and can opt out between the 2nd and 3rd anniversary following first receipt of my military pension if he decides he no longer needs the plan. If DH turns down plan now, he can’t opt in at a later date.
Overall, I wonder if I should purchase the Survivor Benefit Plan considering it is inflation adjusted and provides a minimum salary for my spouse? My concern is it seems expensive. Also, I wonder if I’m over-insured considering our assets. What would you do in our situation?
Will those life insurance policy premiums increase significantly when reaching future age brackets, possible making them unaffordable?
24 times savings of projected retirement spending is great, but what are the projections if either or both of you live to age 95?
If I understood correctly, it sounds like if the survivor option is turned down now it is gone forever, but if signed up for now there is still an option to opt out later, thus giving more time to think over this important choice?
That survivor pension of $2940ish now might not seem like a lot, but since you are both so young, that survivor pension with cost of living increases could be a very substantial amount in 30-40 years.
Statistics: Posted by gator15 — Sun Sep 15, 2024 6:55 pm — Replies 3 — Views 204