Retirees, Make Sure Your Family Knows This

I received a sad note today, from a friend of a widow of a military retiree.  The widow was not prepared for the process by which final military benefits are paid out, and she’s having some stress (both emotional and financial) because of it.

When a military retiree dies, their family notifies the Defense Finance and Accounting Service (DFAS).  Payments to the retiree end as of the date of death.  Any remaining pay will be paid out to the designated beneficiary for Arrears of Pay (AOP.)  After the reporting of the death, the widow, widower or surviving child will receive a package that includes the form to claim the Arrears of Pay, and also includes the form and information to begin payments from the Survivors Benefit Plan (SBP), if the deceased service member had elected coverage under SBP.

The most stressful and confusing part of the process occurs if the retirees death is not reported until after a monthly payment has been processed.  This can occur of the death is near the end of the month, or if the death is not reported immediately.  If a monthly payment is posted after the date of death, DFAS will instruct the bank to reverse the payment.  This is because payments can not be made in the name of the deceased retiree.   While it is all part of the process, and is correct, it can cause distress if the payment has already been spent and/or the family needs that money immediately.

Military retirees, please make sure that your family understands the process that will occur after your death.

  1. Ask them to notify DFAS of the death immediately to prevent overpayment of retired pay.  There is allegedly a form at this web address, but I can not get it to open:  https://cust-support.dfas.mil/raplti/nod/   If that form does not work, notification can be made by telephone  at 800-321-1080. This is likely to be a time consuming process as DFAS has notoriously long queues for their telephone help.  It might be a great job for someone who wants to help.  Please make sure the caller has the decedent’s Social Security Number and the date of death when he or she calls.
  2. Ensure that they have adequate savings to survive until other income, such as Social Security or SBP payments, can begin.
  3. Leave a copy of the SF1174 Claim for Unpaid Compensation of Deceased Member of the Uniformed Services, plus the instructions checklist.  This claim will not be paid until any overpayment has been returned.
  4. If you are enrolled in the Survivor Benefit Plan (SBP), tell your survivors what to expect in the way of benefits.  Also, print out the DD-2656 Verification for Survivor Annuity and its instructions, plus the W-4P  Withholding Certificate for Pension or Annuity, and the SF-1199A Direct Deposit Sign Up Form.  If you have dependent children, also include the DD2788 Child Annuitant’s School Certification.
  5. If you are not enrolled in the Survivor Benefit Plan (SBP), ensure that your family knows that your retirement payment will end with your death.  You do not want this to be a surprise.

While the pain of losing a loved one is not avoidable, it is possible to eliminate many of the stresses that come with a death.  Knowledge and preparation will help ease the transition.

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.
  • Andy

    Thanks..salamat po!

  • Jeff

    Thanks a bunch! I have forwarded this to my dad as well so he can start getting this stuff. I not have a file on my computer with all of these documents for my family to use when I die. DO NOT forget to include a Certified copy of your DD-214 in with these documents. You/your family will always need that ‘golden ticket’ to prove you were a veteran.