viperdriver

With a part time reservist retirement when must I make the election to give part of my check to get survivor benefits for my wife? Is it when I retire at 42 or when I start getting paid at 60? Any insight on how to analyze which is the best option?

rickair7777

Once you reach retirement eligibility (20 good years) they should send a letter (certified?) to your home of record. This will contain a form to allow you to select survivor benefits plan.

If you don't return the form in 60 days or so, they automatically enroll you in the most conservative (and costly to you) plan.

You have to do it at retirement eligibility because one of the options provides your spouse with an immediate benefit if you die before age 60...so you have to elect or decline that immediately.

I think you have another choice to make when you turn 60, but it's all explained in the letter.

TrashToad

Rickair7777 is correct, but arrival of the letter and its wording had me make a call to get the real answer as to when you had to declare. I reached a 'good' twenty years at the end of May and my 'Notification of Eligibility for Retired Pay Letter (NERP) and RCSBP information' letter was dated 1 Oct 2012. Call confirmed the 90-day clock to make any RCSBP change starts on the 20 year date but I was able to reset clock when I went onto vPC-GR website and contested automatic RCSBP allocation.

As with anything retirement, personnel related these days, the military member can go to the vPC-GR website, learn the whole program itself and then guess what applies to your situation or call HQ ARPC and be hassled with wait times and individuals who come across the line sounding bored and uninterested to your personal situations. Some good info on the website.

AF automatically listed the most conservative option for me as I signed in over 90 days but as I said earlier, once I contested auto enroll I now have another 90 days to get necessary paperwork in to defer RCSBP (Reserve Component Survivor Benefit Plan) election. I am now more aware but questions remain which will hopefully be answered by talking to some 'more experienced'..(ie older) peelots. Most important- approach this on case by case basis and do what right for your family and situation.

Three options for Guard/Reserve folk under RCSBP:
Option A: Deferred Election is when member declines participation in the plan until age 60. 20+ year guy dies before age 60 --no money to family ever

I believe at sixty you have another chance to select the SBP (Survivor Benefit Plan) if you choose.

Option B: Deferred Annuity is payable on anniversary of member's 60th birthday of later.

20+year guy dies before age 60 - family gets coin on his 60th birthday and on.

Option C: Immediate Annuity is payable effective the day after member's death.

20+year guy dies before age 60 - self-explanatory

Cost to me (dont know if it would be different based on points accrued)
All costs if not used with each program start at Age 60 or when you get retired pay. Monthly fees subtracted from your retired pay are:
SBP: $247 + Option ?
Option A: 0
Option B: $79
Option C: $113

Hope this helps others.
TrashToad

Adlerdriver

Some guys making these pension decisions decide to take 100% pay and decline the survivor benefit.

Then they use the money that would have been "taken" to provide a survivor benefit and buy a term life insurance policy. In many cases, this option actually works out better financially in both situations. More money while you're living (the insurance can be cheaper than the survivor benefit option) and more money for your loved ones after you die.

Obviously very situation dependant based on your health and what kind of deals you can get for term life. Something to put in your bag of tricks as you approach 60.

Pakagecheck

You do get to choose again at 60. So it would be silly to turn it down initially since you aren't paying anything and if you don't make it, the spousal unit is still covered. At 60, you decide if it is worth it or not. So far, the numbers for me will be an insurance policy.