SBP Military Retirement: What Surviving Spouses Need to Know

How the Survivor Benefit Plan Works

The Survivor Benefit Plan (SBP) is a Department of Defense annuity program that pays eligible surviving spouses a monthly benefit after a military retiree dies. The retiree elects SBP coverage at retirement, choosing a base amount (up to the full retired pay) and accepting a premium deduction from their monthly retirement check.

When the retiree dies, the surviving spouse receives 55% of the elected base amount, paid monthly by the Defense Finance and Accounting Service (DFAS). SBP annuity payments are subject to federal income tax; DFAS reports the taxable amount and provides IRS Form W-4P for tax withholding.

If the retiree elected full coverage based on their entire retired pay, and their retired pay was $4,000 per month, the surviving spouse would receive $2,200 per month in SBP annuity.

SBP and DIC Are Separate Benefits

DIC and SBP are separate benefits administered by different agencies and have different tax treatment. DIC is tax-free; SBP annuities are subject to federal income tax. If you receive both, keep the award records separate and contact DFAS or VA to ask about the status and amount of each payment.

What Happens to Retirement Pay When a Retiree Dies

Military retirement pay stops on the date of death. The Defense Finance and Accounting Service must be notified as soon as possible — call 1-888-332-7411 (DFAS Retired and Annuitant Pay). Any retirement payments deposited after the date of death will be reclaimed by DFAS through the veteran's bank.

This is why notifying DFAS quickly matters. If a direct deposit lands after death and the family has already spent or moved funds from that account, DFAS will reclaim the payment from the bank. An overpayment may also be collected from the estate or a survivor who received the funds, so do not assume a joint-account holder is protected from repayment.

After retirement pay stops, DFAS must establish the separate SBP annuity. Contact DFAS for the expected start date and any amount due for earlier months.

How to File the SBP Claim

The surviving spouse files the annuity claim directly with DFAS. You will need:

• A copy of the death certificate showing cause of death
• Marriage documentation if DFAS requests it to verify the beneficiary
• The veteran's Social Security number
• DD Form 2656-7 (Verification for Survivor Annuity) and any supporting documents DFAS requests

DFAS accepts claims by online upload, mail, or fax. Annuity eligibility begins the day after the retiree's death; contact DFAS about payment timing and any amount due for earlier months.

If the retiree did not elect SBP coverage (or specifically declined it at retirement), there is no annuity available. SBP is an opt-in program with an election window at retirement — it cannot be added retroactively after death.

SBP vs. SGLI: Two Different Programs

Families sometimes confuse SBP with Servicemembers' Group Life Insurance (SGLI). They are entirely separate:

• SBP is a monthly annuity paid for the surviving spouse's lifetime (or until remarriage before age 55). It comes from DFAS.
• SGLI is a one-time lump-sum life insurance payout (up to $500,000). It comes from the Office of Servicemembers' Group Life Insurance (OSGLI) and is administered by Prudential.

A surviving spouse can receive both — they do not offset each other.

When SBP Payments Stop

SBP annuity payments continue for the surviving spouse's lifetime with two exceptions:

• Remarriage before age 55 terminates SBP eligibility. If the new marriage ends (by death, divorce, or annulment), the surviving spouse can request reinstatement of SBP.
• Remarriage at age 55 or older does not affect SBP — the annuity continues.

If the retiree elected child-only SBP coverage or if there is no surviving spouse, eligible unmarried dependent children receive the annuity until they turn 18 (or 22 if enrolled in school full-time).

The Veteran's Death Benefits & Survivor Claims toolkit coordinates the SBP claim timeline with DIC and Survivors Pension applications — three separate monthly benefits that use different agencies and different forms but share overlapping documentation requirements.