Survivor Benefit Plan: Does Spousal Age Difference Affect Your Benefits?

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I read the $1,000.00 example that you write and 50% of 1K is 500.00 a month for my wife. That makes sense and I understand. My Q is my spouse is 12 yrs YOUNGER than I am. Does the Age difference make a difference in the SBP cost? – Albert 

Understanding how survivor benefits work, especially when your spouse is significantly younger than you, is a crucial aspect of financial planning for retirement.
Today, we address a question from Albert regarding the Survivor Benefit Plan (SBP) and whether a spousal age difference impacts the benefits.

Key Factors Affecting SBP Costs

If you are married and approaching retirement with no other claims on your retirement benefits, your current spouse is your primary beneficiary. This means that the age difference between you and your spouse does not affect the cost of the survivor benefit, which remains at 10%.

However, if an ex-spouse has a claim on your pension, the situation changes. In this scenario, your ex-spouse becomes the primary beneficiary, and your current spouse is considered a secondary beneficiary. This arrangement can lead to higher costs as you must account for both the ex-spouse and your current spouse in the survivor benefit plan. The increased cost is due to the multiple beneficiaries, not the age difference.

Age Difference and SBP Costs

Rest assured, a spousal age difference does not disrupt the stability of the survivor benefit plan. The standard cost remains a steady 10% of your pension for the full survivor benefit, making it a reliable and cost-effective option. This remains true as long as there are no other complicating factors, such as claims from an ex-spouse.

Health Insurance Benefits

Ensuring that both you and your spouse meet the Federal Employees Health Benefits (FEHB) program requirements is of utmost importance. For you, this means being enrolled in FEHB for at least five years before retirement and being eligible for an immediate pension. For your spouse, the requirements are to be enrolled in FEHB before your death and continue to receive the survivor benefit. Meeting these criteria is not just beneficial, it’s crucial, as it allows your spouse to retain health insurance for life, a significant and reassuring benefit.

Personalized Advice

If you have further questions about survivor benefits or other aspects of federal retirement, remember, you’re not alone. It’s essential to consult with experts who can provide personalized advice tailored to your specific situation. Schedule an appointment with us at Plan Your Federal Retirement. Our advisors are here to ensure you receive the best guidance possible, supporting you every step of the way.

Micah Shilanski  00:06

Have you ever wondered how survivor benefits work when your spouse is younger than you? Well, if so, then stay tuned for this FERS Federal Fact Check. Hi, I’m Micah Shalanski from plan your federal retirement, and today we have a question that came in from Albert about survivor benefits. Albert says, regarding SBP, survivor benefits program, I read that there’s $1,000 example that you’re going to get in the 50% to your spouse. That’s $1,000 becomes $500 for your wife. That makes sense, understand. But the question is, if my spouse is 12 years younger than I am, does the age difference make a difference in the spousal benefit cost? Albert, that’s a great question, and I’m going to give you a depends answer, so sorry about that. It really depends on how it’s set up. Now, if you are married and you’re getting ready to retire and there’s no one else that can claim on your retirement benefits, like an ex spouse, then your wife is treated as your current spouse, and there’s no additional cost regardless of age. It’s just the 10% for the full survival benefit. However, if you have an ex that can claim on your pension, then your ex is kind of treated as your current wife. Your current wife is kind of treated as a special interest, and then now there’s going to be a different cost for you, because you have to pay for an ex spouse. You’re gonna have to pay for that ex spouse, plus you’re gonna have to pay for your current spouse. So that’s how the survivor benefit cost could be higher for you, not so much because of the age difference, a lot more because someone else could claim on your benefits, but just because your spouse is younger by default? The answer is no, it’s only that 10% benefit, which is a great deal. And more importantly, assuming you meet your two health insurance qualifications, you’ve been in FEHB for five years prior retirement, and you’re retired the eligibility of immediate pension, and your spouse meets their two requirements. One, they’re in FEHB before you die, and two, they receiving a survivor benefit. They get to keep that health insurance for life, which is an amazing benefit. for them as well. If you have questions, like this or want to learn about survivor benefits, then, make sure you’re contacting us to make an appointment. So, let’s sit down with myself, or one of our great advisors on our team, and answer your questions to make sure you’re getting the best advice possible. Until next time, happy planning.

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