When a military retiree dies, retired pay stops immediately. The Survivor Benefit Plan exists to address that, providing to an eligible surviving spouse a monthly annuity that continues for the rest of the spouse’s life. It is a Department of Defense program administered by Defense Finance and Accounting Service (DFAS), separate from VA benefits and private life insurance.
How It Works and What It Pays
At retirement, a service member elects to participate in SBP and chooses a base amount — up to their full gross retired pay. Upon the retiree’s death, the surviving spouse receives 55 percent of that base amount as a monthly, inflation-adjusted annuity for life. SBP annuities received a 2.8 percent COLA increase effective Dec. 1, 2025, keeping pace with military retired pay.
The annuity is lifetime. It does not run out. It continues as long as the surviving spouse remains eligible, meaning the spouse has not remarried before age 55. Remarriage before 55 suspends the annuity but does not end it permanently; if that marriage later ends by death or divorce, the annuity can be reinstated. Remarriage at 55 or older does not affect payments at all. After the retiree’s death, DFAS sends the surviving spouse an application, and the annuity typically begins within 45 to 60 days.
Read More: Here Is What the VA Will Provide for a Veteran’s Burial
What It Costs
The standard cost for spouse-only coverage at the maximum level is 6.5 percent of the elected base amount, deducted from retired pay before taxes. Coverage reaches paid-up status after 30 years of payments and age 70; both conditions must be met. Once paid up, coverage continues for the spouse’s lifetime at no further cost.
The Most Important Update Since 2021: The Widow’s Tax Is Gone
For decades, surviving spouses who qualified for both SBP and VA Dependency and Indemnity Compensation faced a dollar-for-dollar offset. Their SBP was reduced by the DIC amount, effectively canceling out one benefit against the other. This policy, known as the “widow’s tax,” was phased out and fully eliminated as of Jan. 1, 2023.
Surviving spouses who qualify for both programs now receive the full SBP annuity from DFAS and the full DIC payment from the VA simultaneously with no reduction to either. The 2026 DIC base rate for a surviving spouse with no dependent children is $1,562.74 per month, tax-free, paid for life. A surviving spouse receiving a $2,200 SBP annuity and full DIC now collects more than $3,700 combined monthly, both with annual COLA protection. Surviving spouses whose SBP was being offset before January 2023 should verify with DFAS that their full payment has been restored.
Key Rules to Know
The SBP election is made at retirement and is, in most cases, permanent. Declining or reducing spouse coverage cannot be reversed after retirement; the only window to voluntarily terminate participation opens on the second anniversary of retired pay and lasts one year. The non-military spouse must sign a written, notarized consent to any election below the maximum level. Every retiree is automatically enrolled at full coverage unless the spouse agrees otherwise in writing.
Divorce ends spouse SBP coverage automatically. To continue a former spouse as beneficiary — or if a court order requires it — the retiree must notify DFAS within one year of the divorce. Missing that window ends the former spouse’s eligibility regardless of any court order. DFAS’s SBP website.
Remarriage after retirement restores coverage for the new spouse on the first anniversary of the marriage unless the retiree elects otherwise within one year. SBP premiums are deducted pre-tax and are reflected on Form 1099-R rather than as a separate tax deduction. The surviving spouse’s annuity payments are subject to federal income tax.
Service members with questions about SBP can contact DFAS at 800-321-1080, Monday through Friday, 8 a.m. to 5 p.m. ET, or visit DFAS’s SBP website.
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