GolfingDuo
Recycles dryer sheets
I'm learning some things myself as I go along. Lets get the FERS thing out of the way. It has nothing to do with my situation. DW and kids still get Tricare if I go whether or not I have SPB.
On the trust thing, the UW gets whatever is left of the trust after both DW and I are gone (kids don't get anything from it). During the 8 years from 62 to 70, If I die, the $300,000 would get added to whatever we had in the trust and then she gets paid at 5% out of it. So lets say I croak at 65 and we had built up $130,000 into it, now its worth $430,000 and she gets 5% a year from it (or about $1790/mo). It's not COLA protected but its better initially than the $1660/mo from SBP.
If I DO live however, at 70 we BOTH get a stream of income out of the trust (as will either one of us, until both die). So during the 8 years from 62 - 70 I saved $24,000 from not paying SBP and in fact subsidized the trust with that money. If I live another 20 years after that I will have saved an additional $60,000. Plus obviously the stream of money from the trust for those years.
Hopefully I have answered you question on the 8 year time frame.
It does. It is just hard to fathom how it would work for me but I will work the numbers. I guess it can. I think though because I have the added portion of FEHB I think I might keep that one at 1/4 there-by keeping the FEHB option open. I do have two pensions to cover but no matter each way we do have plenty of savings and she will get my SS. Baring any unforseen incidences we are relatively healthy.
Who has bigger buidlings than the insurance companies? The government comes to mind as the obvious answer. The OP can either give money to an insurance company or to the government. He is smart to be looking for the best cost for the coverage he actually needs. When I retired from active duty in 1993 we looked at the choices and bought term life insurance and declined the SBP. The term insurance ends in a few years when DW's pension and SS will be more than she actually needs to live. I plan to live another 40 years. I would really be pissed to look back at age 100 on 60 years of SBP payments knowing that I really only needed 22 years of insured coverage.
I know nothing about setting up a charitable trust but what the OP has posted so far about setting up a trust with wraparound insurance looks very interesting.
Tha is part of the reason why I have a hard time grasping the idea. It seems to make sense. I do not have 100k to give to an alma matter so that option is out but I do belong to USAA and their rates are pretty good. It looks like I would spend about the same for SBP but as stated for a shorter period of time. I have two pensions as I mention to cover for. One though I think I will keep SBP at 1/4 if for nothing else the FEHB option if needed. The other pension could be made up with the life insurance. It can make sense. After I reach 70 or 75 I would not need it any more so I could just let it lapse. I could do whole/universal life but that seems to be counter intuitive.
Thanks for helping out here. I have plenty of time to decide.