Originally Posted by
MPAdriver
I have spoken to financial planners, peers, etc....and I even suffered thru the USPA&IRA era, yep I lost there big.
SBP -
#1 everyone's situation is different, so you have to decide what makes sense for you and your spouse. Full SBP will cost you between $240-$280 per month depending on rank.
#2 you can do both. But when you look at return on investment and what does your spouse NEED and how would you like her to live, when you move on to the great blue yonder. What I found were a couple things that if I were in that situation then I would go SBP. My wife was 10 years or more younger. I had young children and I was 50 or older. I had bad health and or any combo of the above. My wife did not and is not going to work. I did not have a retirement job where I was going to be saving money. I could not get a reasonable and large life insurance policy (see Navy Mutual Aid).
My situation: Me 41, Wife 39: kids 19,18,11. Wife has been a PERFECT military-stay at homemaker, but never worked. However she is in Physical Therapy School and the average salary is $40k per year. If I kick the bucket today she can work from age 40-60 and be fine. She will only have one child at home for the next 7-10 years. I have $1 mil policy that is about $80 per month. So if anything happens between today and me turning 60, she's good, if not great, b/c she would also have my social security. SO that is my plan from 41-60 years of age.
Hopefully I last longer than 60. If so, then I will have worked from 41-60 and saved additional money (this is where you have to figure how much you will need to save to get you/spouse from 60 - 85ish/90ish).
MY plan/situation - Work at UAL from 41-60ish (currently UAL poolie). At a min I will be saving 16% annually in the B fund - likely much, much more in the coming years. After year one airline pay, we will bank every mil retirement check from 42 years old until at least 60 years old. I will keep my $1 mil policy until it expires at 60, just in case...oh yea by the way, Navy Mutual Aid DOES cover you with no extra expense if you ball it up on short final (aviation clause).
Anytime after age 60 and I take flight to the blue yonder, wife will have 18 years of banked mil retirement checks + all the savings from 20ish years of my second career + my social security. If she can't live on that in a very nice way, well then .....she needs to go to work (LOL).
That is my plan....I am always looking for holes in it, so if you see any feel free to ask away.
You might want to take a look at the Social Security survivor benefit. Assuming no one is disabled, your spouse will get a benefit for each child under age 18. After that, the surviving spouse can draw a reduced benefit as early as age 60 or a full benefit at full retirement age (should be 67 for your spouse). There will be a gap between the time the last kid is 18 until she can draw a full benefit. I started drawing Social Security at age 65. Wife was age 60. Picked up a cheap decreasing term life insurance policy to bridge the gap should something happen to me before she can draw a survivor benefit.