How to Complete DD Form 2656: SBP Election, Beneficiaries, and Filing

DD Form 2656, Data for Payment of Retired Personnel, is the form that establishes your retired pay account with the Defense Finance and Accounting Service, and to complete it you work through five parts and twelve sections covering your identifying information, direct deposit, tax withholding, Survivor Benefit Plan election, and beneficiary designations. Every member of the Army, Navy, Air Force, Marine Corps, Space Force, Coast Guard, NOAA Corps, and U.S. Public Health Service Commissioned Corps must submit it before retirement, and DFAS cannot release a single monthly payment until the form is processed.¹ Errors on this form translate directly into a longer gap between your last active duty paycheck and your first retired pay deposit, so accuracy matters more here than on almost any other retirement document.

Gather Your Information First

Opening the form before you have your documents in front of you is the fastest way to stall out. Pull these together before you start:

Your bank’s nine-digit routing transit number and your account number, verified against a voided check or official bank records rather than memory.
Social Security numbers and dates of birth for yourself, your spouse, any dependent children, and anyone you plan to name as a beneficiary.
Your exact retirement date as established by your military department. Reserve component members eligible for a Reduced Retired Pay Age use that confirmed date, not the transfer-to-retired-reserve date.²
VA disability information: the effective date of payment and the monthly amount, if you have applied for or are receiving compensation.
Your SBP decisions, worked out with your spouse if you are married.
Details of any prior separation pay you received, for Section III.

The current version of the form is the March 2022 edition. The DFAS Forms Library includes an interactive Smart Wizard that walks you through each field and flags incomplete entries before you submit.³ Air Force and Space Force members typically complete and submit the form through myFSS instead of using the standalone PDF.⁴

Working Through the Sections

Section I: Identifying Information

Enter your full legal name, Social Security number, date of birth, branch of service, component, mailing address, and email. Match your name to your personnel records exactly. A middle initial mismatch can create an administrative delay before your account is even opened.

Section II: Direct Deposit

Enter the nine-digit routing number and account number for the bank account where you want retired pay sent. Verify both against official records. DFAS does not issue paper checks as a default, so this section is not optional.¹

Section III: Prior Separation Pay

If you previously received a lump-sum separation payment, that amount must be recouped from your retired pay before you receive full payments. Report the details here so DFAS can calculate the offset correctly.

Section IV: VA Disability Compensation

Every retiree must acknowledge in Block 15a that they will notify DFAS if awarded VA disability compensation. If you are already receiving compensation or have applied, mark “Yes” in Block 15b and fill in the effective date and monthly amount.⁵ Skipping Block 15a is a common cause of processing delays even for retirees who have never filed a VA claim.

Federal law generally prohibits receiving full retired pay and full VA disability compensation at the same time. DFAS reduces retired pay dollar-for-dollar by the amount of the VA award through a mechanism called the VA waiver.⁶ Answering Section IV honestly lets DFAS set that offset correctly from the beginning. If you receive a VA rating after retirement, you must notify DFAS at that point as well.

Section V: Beneficiary for Unpaid Retired Pay

This section designates who receives any retired pay you earned but had not been paid at the time of your death, sometimes called arrears of pay. Name one or more beneficiaries with their Social Security numbers and addresses. Without a designation, the funds pass through your estate and can be delayed by probate.¹

Section VI: Federal Tax Withholding

Select your filing status and any additional withholding amount, the same way you would on a W-4. You can adjust the election later through myPay or by sending an IRS Form W-4 directly to DFAS.⁷

Section VII: State Tax Withholding

DFAS only withholds state tax if your state has a withholding agreement with the Department of Defense, and only for one state at a time.⁸ If your state of legal residence participates, enter the state and the amount or percentage. If not, leave it blank and plan to make estimated payments.

Section VIII: BRS Lump Sum Election

This section applies only to Blended Retirement System participants, who may elect a discounted lump sum of either 25 percent or 50 percent of the present value of their future retired pay through age 67, with monthly payments reduced accordingly until full payments resume at 67. Retirees under the legacy High-3 or Final Pay system skip Section VIII.

The SBP Election Is the Section to Slow Down On

The Survivor Benefit Plan sections cover Sections IX through XII and represent the most consequential decisions on the form. SBP pays a monthly annuity to your eligible survivors after your death, and the choices you lock in here are difficult to reverse.

Section IX collects dependency information: names, dates of birth, and Social Security numbers for your spouse and dependent children. Section X is the actual election: whether to participate, who is covered, and at what level.

If you are married when you become entitled to retired pay, federal law automatically enrolls you at the maximum coverage level unless you affirmatively elect out or choose a reduced level with your spouse’s written agreement.⁹ Your spouse’s concurrence signature must be either notarized or witnessed by an SBP counselor. A plain signature is not enough.¹⁰ If concurrence is missing or improperly witnessed, DFAS defaults you to maximum spouse coverage and starts deducting premiums.

You select a base amount for the annuity, which can range from $300 to your full monthly retired pay.¹¹ Your surviving spouse or former spouse receives 55 percent of the base amount for life.¹² The premium for spouse or former spouse coverage is 6.5 percent of the base amount, deducted from gross retired pay before taxes.¹³ A lower base amount reduces the premium and reduces what your survivor receives.

Section XII is where your spouse signs the concurrence if you are electing anything other than maximum spouse coverage. Your installation’s retirement services office should walk both of you through this during mandatory pre-retirement counseling. The exception to the spouse concurrence requirement is narrow: you must show that your spouse’s whereabouts cannot be determined, or that exceptional circumstances make seeking consent inappropriate.⁹

Once your retirement date passes, opportunities to change the election are extremely limited. The law provides a one-year window beginning on the second anniversary of your first retired pay payment to elect out entirely, which requires your spouse’s concurrence and permanently forfeits all premiums paid to that point.¹⁴

Former Spouse Coverage

If a divorce decree or court order requires you to provide SBP coverage to a former spouse, that obligation must be reflected on the form. You can voluntarily elect former spouse coverage in Section X. If you do not, your former spouse can submit a deemed election directly to DFAS using DD Form 2656-10.¹⁵

The deemed election must reach DFAS within one year of the court order requiring coverage, along with a certified copy of the divorce decree. Submissions go to the DFAS Garnishment Law Directorate at PO Box 998002, Cleveland, OH 44199, or by fax to 1-877-622-5930.¹⁵

If your marital status changes after retirement and you need to switch from spouse to former spouse coverage, you have one year from the date of divorce to do so using DD Form 2656-6 along with DD Form 2656-1 and a copy of the divorce decree.¹⁶ Missing that window can permanently forfeit the former spouse’s coverage.

Where to Send the Form and When

Submit the completed form 60 to 90 days before your retirement date so DFAS can establish your account before the first payment is due. You have three options:

Online through askDFAS. The Smart Wizard links directly to the askDFAS upload tool, which is the fastest route for most retirees. Air Force and Space Force members submit through myFSS instead.³⁴
By mail to Defense Finance and Accounting Service, Cleveland Center, 1240 East Ninth Street, Attention: 19th Floor Vault, Cleveland, OH 44199.¹⁷
By fax. Contact DFAS customer service to confirm the current fax number for retired pay documents; it is different from the garnishment fax line.

Keep a signed and dated copy of everything you submit. If something goes wrong in processing, your copy is your only proof of what you elected.

After You Submit

Retired pay is due on the first of each month. If the first falls on a weekend or holiday, payment arrives on the last business day before that date.¹⁸ Your first payment should arrive within 30 days of your retirement date if the form was submitted on time and processed without errors.

Once your account is active, DFAS issues a Retiree Account Statement that breaks down gross retired pay, SBP premiums, tax withholding, and net deposit. Compare it against the elections you made on the form. A wrong SBP base amount, an incorrect tax status, or a missing state withholding election is far easier to fix in the first few months than after a year of incorrect deductions.

After the account is established, most routine changes move to myPay. You can update federal tax withholding, direct deposit, state tax withholding, and access your annual 1099-R through the portal without submitting paper forms.⁷ SBP election changes still require specific paper forms.

Common Mistakes That Delay Payment

DFAS quality-control teams flag the same errors repeatedly. Knowing what trips people up can save weeks of processing delays.

Wrong retirement date in Block 4. Reserve component members frequently enter the transfer-to-retired-reserve date instead of the age-60 date or confirmed Reduced Retired Pay Age. The form’s instructions explain which date to use.²
Incorrect component selection in Block 7. Selecting Active Component when you are a Reserve or Guard retiree, or choosing the wrong retirement type, routes the form down the wrong processing path.
Missing or improperly witnessed spouse concurrence. If you elected less than full spouse SBP coverage and the spouse signature is missing, not notarized, and not witnessed by an SBP counselor, DFAS defaults you to maximum coverage.
Incomplete banking information. A single transposed digit means your first payment bounces.
Leaving Section IV blank. Every retiree must acknowledge the VA disability notification requirement in Block 15a, even without an existing VA claim.

Failing to provide requested information does not exempt you from filing. It only delays the start of your retired pay.¹ The gap between your last active duty paycheck and your first retired pay deposit is real, and late or error-filled submissions are the most common reason that gap stretches longer than it should.

1
Department of Defense. DD Form 2656 – Data for Payment of Retired Personnel
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Defense Finance and Accounting Service. Gray Area Retirees – Air National Guard and Air Force Reserve
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Defense Finance and Accounting Service. Retired Military and Annuitants
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Air Reserve Personnel Center. DD Form 2656 Instruction Slides
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U.S. Army Garrison Bavaria. DD Form 2656 Data for Payment of Retired Personnel
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Department of Defense. Financial Management Regulation Volume 7B Chapter 12 – Waiver of Retired Pay
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Defense Finance and Accounting Service. Federal Income Tax Withholding
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Defense Finance and Accounting Service. Retired Military Forms
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Office of the Law Revision Counsel. 10 USC 1448 – Application of Plan
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Department of Defense. SBP Open Season Guidance
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Defense Finance and Accounting Service. Survivor Benefit Plan Costs and Benefits Spouse Coverage
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Soldier for Life. Survivor Benefit Plan Mandatory Brief
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Office of the Law Revision Counsel. 10 USC 1452 – Reduction in Retired Pay
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Office of the Law Revision Counsel. 10 USC 1448a – Election to Discontinue Participation
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Defense Finance and Accounting Service. SBP Beneficiary – Former Spouse Deemed Election
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U.S. Air Force. Survivor Benefit Plan (SBP)
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Defense Finance and Accounting Service. Retired Military Customer Service
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Defense Finance and Accounting Service. Retired Pay Schedule