Some people may have already heard this story, but it is worth repeating.
The Survivor Benefit Plan (SBP) can be a complicated decision. Even as a CERTIFIED FINANCIAL PLANNER® and Army Reserve chaplain, I had my own difficulties when it came time to make a decision.
This is the Reserve Component version.
On the Backburner
After receiving the retirement letter, I was so elated that I had finally reached the goal of twenty years of qualified retirement service, that I put the SBP on the backburner. Perhaps other people do the same thing. This is a mistake.
They trust the Army, so they go with the default. The Army won't let me down. The Army, as an institution, cares about its personnel.
The Army does not care what decision you make on this form - only that you make one.
There are multiple options to choose from. The decision can be complicated. So, take your time and evaluate your situation before you make a decision. If you need help, consult with a military-focused financial advisor.
It became real when I realized that I had 90 days to make a decision. Stephanie and I elected Option B.
The Form We Signed
Not an actual form
I wanted to retrieve the form we signed so that I could confirm my SBP election. I searched my OneDrive and Google Drive folders. I couldn't find it. I don't even know how to look it up in the military system to see what we decided.
How can I write an article on the SBP election as a financial advisor for military leaders and not even keep track of my own documents? This is ridiculous.
I found the document in iPERMS, which was ChatGPT's first recommendation for where to look.
For military leaders reading this, this is NOT the active-duty version. There is a difference. They are two different situations, with two different forms, and have two different option selections.
Know Your Options
How much life insurance do we have, honey?
The tradeoff is evaluating life insurance coverage versus whatever option you select with the SBP election form. Most people don't like to think about a spouse dying prematurely. Do it anyways.
You need to understand their options. What life insurance do we currently have? How much income will the surviving spouse or dependent need to maintain a comfortable lifestyle? Nobody wants to shop at Costco for bulk chicken and rice items. No one.
It gets even more complicated if the servicemember is divorced with children because then you are planning for a child, not a surviving spouse.
SBP touches life insurance, retirement planning, and even taxes (depending on what type of life insurance policy or policies the family has). It also relates to estate planning. All decisions interact with each other; they're not isolated. For example, permanent life insurance policies are treated differently for tax purposes than term life insurance.
Don't take this decision lightly.
Know your options. Default is not always the best decision.
Know a military leader or veteran family thinking through this? Forward it to them. If someone forwarded this to you, you can join Exponential Purpose here: exponentialedge.kit.com/profile
With you in it, Joshua Brooks, CFP® Founder, Exponential Advisors Army Reserve Chaplain
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Joshua serves as a chaplain in the U.S. Army Reserve. Nothing here implies endorsement by the Department of Defense, the U.S. Army, or the Chaplain Corps.
Exponential Advisors LLC is an investment adviser registered with the Texas State Securities Board. Registration with any securities authority does not imply a certain level of skill or training. Exponential Purpose is educational and is not individualized investment, tax, or legal advice. Full disclosures: exponentialadvisors.net/disclosures
The survivor election. The TSP. The first civilian offer. They all land at once. I'm Joshua Brooks, CFP® professional and Army Reserve chaplain, and Exponential Purpose helps military leaders and their families decide well, together, before the deadlines arrive.