If you are an armed serviceman and you want to secure the future of your loved ones, the best time to start planning is now, primarily through the Reserve Component Survivor Benefit Plan (RCSBP).
RCSBP is an avenue for armed services men in the reserve component to ensure future payment plans for their loved ones if they die before retirement pay. The payment is called annuity and goes every month to eligible beneficiaries. The article will feature every detail about the RCSBP.
How the Reserve Component Survivor Benefit Plan Works?
RCSBP will cover your beneficiary for a lifetime with a payment that depends solely on a certain percentage of your retired pay and the model you choose. As stated earlier, you can participate in the Reserve Component Survivor Benefit Plan if you work or work in the Army, National Guard, Navy, Marine, and Air Force Reserve.
How to Enroll for the RCSBP?
You will be eligible to sign up for the Reserve Component Survivor Benefit Plan if you have served up to 20 years of services before retirement. Once you reach this stage, you will receive the Notice Of Eligibility (NOE) letter to retire. You have up to 90 Days to reply to this correspondence. Otherwise, the respective Departments will automatically enroll you if you have children or a wife. If you choose not to participate in the RCSBP, you may be required to obtain a signed consent from your wife.
The program gives you 3 options to choose when your annuity payment can begin; these choices are
- Option A: You can opt not to participate in thr program. The implication is that your loved ones will not receive any annuity whenever you die. However, you still have a chance to change your mind at 60.
- Option B: The second option comes with coverage that allows your beneficiaries to get the annuity at the due age to get retirement pay, usually at 60 years. On the other hand, if the retiree has started receiving his retirement pay before 60, then the annuity will be paid a day after you die.
- Option C: This option approves annuity payment immediately after your death, regardless of age.
Eligible Beneficiaries for the RCSBP
There are multiple options on who you can choose as your beneficiary for the RCSBP program. You can choose your family members and go beyond them; for instance, you can choose anyone with a financial interest. Other eligible beneficiaries you can choose from are your:
• spouse
• spouse and child
• child only
• former spouse
• former spouse and child
How to Stop or Change Your RCSBP Coverage?
As stated earlier, once you have only about 90 days to respond or make changes immediately after receiving your NOE, further changes may be void. Notwithstanding these guidelines, there are avenues to make changes or stop the progress o the coverage in exceptional circumstances. You can reverse the RCSBP program or make changes if you opt out of the program on the second year your start receiving your retirement salary: There I also a chance for people who were later deemed mentally competent. You can also stop it if the initial beneficiary is not a former spouse. If you want to make these changes, you can start by calling the U.S. Military retired pay at 800-321-1080 or visiting the Defense Finance and Accounting Service in Indianapolis.
What the RCSBP Programs Costs
You are not required to pay extra for the RCSBP program if you are below 60 or are retired when you are eligible to receive retirement pay. The monthly cost is taken from your retirement check, calculated based on your age and your beneficiary during the tie you choose a coverage plan. The RCSBP keeps you from paying extra costs for children; you will only be required to pay extra if the child will still be an eligible beneficiary when you clock 60 years. It is also worth noting that the required minimum base amount is $300, while the maximum amount is the full retired pay. You can calculate the potential costs of the RCSBP coverage here.
Conclusion
The annuity payment for the Reserve Component Survivor Program is around a base amount of about $2,625; this amount is calculated by combining many factors like age, premium, etc. Nevertheless, you should always reach out to a financial advisor to make the best choice.
Frequently Asked Questions
- What is Spouse Concurrence?
Spouse Concurrence is a D.D. Form 2656-5 that the notary public must notarize. The form is what dictates that a married person should not automatically be enrolled in the survival benefit plan.
- What happens when your spouse dies or you remarry?
You have a few choices if your wife dies or you remarries. One of the few things you can do is to start coverage for your new wife, increase the coverage amount to the allowed maximum, or you can cancel and cease participation.
- Is RCSBP coverage for a former spouse automatic?
No, a former spouse is not automatically covered; however, you or your former spouse must submit the D.D. Form 2656-10.
- What happens when I take no action within one year?
RCSBP coverage of spouse will be suspended.
