Divorce

Divorce and Social Security

Divorce and Social Security

How does divorce affect Social Security retirement benefits?Divorce and Social Security

After a divorce, you can claim retirement benefits based on your own earnings record (if you have been employed and have accumulated enough credits over the years), or you can claim benefits based on your ex-spouse’s earnings record (whether or not you ever worked), provided that certain requirements are met.

What requirements must be met?

You may qualify for benefits based on your ex-spouse’s earnings record if all of the following conditions are met:

  • Your ex-spouse is currently entitled to receive Social Security retirement or disability benefits
  • You and your ex-spouse were married for at least 10 years before the divorce became final
  • You are not currently married
  • You are age 62 or older, and
  • You aren’t entitled to collect a retirement or disability benefit based on your own earnings record that equals (or exceeds) one-half of your ex-spouse’s PIA

If you are age 62 or older and you’ve been divorced for at least two years, you can receive Social Security benefits based on your former spouse’s earnings regardless of whether that spouse is already receiving benefits. This, of course, is assuming that the other four requirements listed above have been satisfied.

How much can you receive?

If you begin receiving benefits at your full retirement age (66 to 67, depending on your year of birth), your spousal benefit  is equal to 50% of your ex-spouse’s full retirement benefit (or disability benefit). For example, if your ex-spouse’s benefit at full retirement age is $1,500, then your spousal benefit is $750. However,  there are several factors that may affect how much you ultimately receive.

For example, if you’re eligible for benefits based on your own earnings record then the Social Security Administration (SSA) will pay that amount first. But if you can receive a higher benefit based on your ex-spouse’s record, then you’ll receive a combination of benefits that equals the higher amount.

When you  begin receiving benefits will also affect the amount you receive. You can receive benefits as early as age 62, but your monthly benefit will be reduced (reduction applies whether the benefit is based on your own earnings record or on your ex-spouse’s.)  This reduction is permanent. In other words, if you choose to receive reduced benefits at age 62, you will not be entitled to collect full benefits when you reach your full retirement age. If you decide to receive benefits later than your full retirement age, your benefit will   increase by 8% for each year you wait past your full retirement age, up until age 70 (increase  applies only if benefit is based on your own earnings record).

In addition, if you work after you begin receiving benefits (before you reach your full retirement age) and your earnings exceed the annual earnings limit that applies, your Social Security benefit may be reduced. Receiving a pension based on work not covered by Social Security may also result in a benefit reduction.

Note: If you decide not to collect retirement benefits until  full retirement age, you may be able to  maximize your Social Security income by claiming your spousal benefit first. The option to file a restricted application for spousal benefits  may be available to you if you were born on January 1, 1954 or earlier. By opting to receive your spousal benefit at full retirement age, you can delay claiming benefits based on your own earnings record (up until age 70) in order to earn delayed retirement credits. This can boost your benefit by as much as 32%. Because deciding when to begin receiving Social Security benefits is a complicated decision and may have tax consequences, consult a professional for help with your individual situation.

How does remarriage affect Social Security benefits?

If your ex-spouse gets remarried and you don’t, your Social Security entitlement will be unaffected.

If you remarry,  you generally can’t collect benefits based on your ex-spouse’s record unless your current marriage ends. Any spousal benefits you receive will instead be based on your current spouse’s earnings record.

What if your ex-spouse has died?

You may also qualify for Social Security survivors benefits based on your ex-spouse’s earnings record if your former spouse has died. You may qualify if:

  • Your ex-spouse was entitled to Social Security benefits
  • You and your ex-spouse had been married to each other for at least 10 years before the divorce was finalized
  • You are age 60 or over (or are between ages 50 and 60 and are disabled)
  • You aren’t currently married, and
  • You aren’t entitled to a retirement benefit that is equal to or greater than 100 percent of your deceased spouse’s benefit

Note that if you meet the above conditions, you will be entitled to full survivors benefits; that is, you will collect an amount equal to 100 percent of your former spouse’s PIA, not merely one-half. However, if you’re under full retirement age, your benefits will be reduced for each month you receive benefits under your full retirement age. Benefits at age 60 will be 71.5 percent of your former spouse’s PIA. It’s also important to note that a divorced spouse may be entitled to a mother’s or father’s benefit if caring for the dependent child (under age 16 or disabled) of his or her deceased former spouse. Typically, the amount of a mother or father’s benefit is equal to 75 percent of the deceased spouse’s PIA. Unlike a spousal benefit, it isn’t necessary for the marriage to have lasted 10 years.

For more information on how divorce may affect your Social Security benefits, contact the SSA at (800) 772-1213 or visit socialsecurity.gov.

Thank you for taking the time to read this article. We hope it has given you some insight into Social Security.  If you have any questions or would like more information, please feel free to contact us. We would love to hear from you. Our newsletter is a great way to stay up-to-date with our latest offerings and get helpful retirement planning tips. Signing up is easy; click here.

 

Broadridge Investor Communication Solutions, Inc. prepared this material for use by Social Security Benefit Planners, LLC.
Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on individual circumstances. Social Security Benefit Planners, LLC  provide these materials for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Social Security Benefit Planners, LLC and its affiliates are in no way associated with or approved, endorsed, or authorized by the Social Security Administration.

How does Divorce and Social Security Work?

How does Divorce change my Social Security

We get a lot of questions regarding Divorce and Social Security. How it works, and who qualifies for what? Filing for Social Security involves a dizzying array of choices and decisions. When should you claim benefits? What’s the best way to maximize your income? Selecting the right options isn’t easy for anyone, and for those who are divorced it can be even harder. If you’re confused by the myriad of rules and regulations around filing for Social Security as a divorced individual, keep these guidelines in mind:

If you were married over 10 years, you can claim spousal benefits. This is true as long as you meet the following conditions:

  • You’ve been divorced for at least two years at the time you file.
  • You have not remarried.
  • You have reached the age of 62 (or older).
  • Your spouse is qualified by work history and citizenship to claim Social Security retirement/disability benefits.

Your spousal benefit will be equal to one half of the full retirement amount your ex-spouse is qualified to receive, assuming you file at your full retirement age. In many cases, this could be more than the amount you would receive based on your own work history – if you were out of the work force caring for children, for example. If your own work record is higher than you will receive your own benefit. In either case if you file at age 62 this could reduce your benefit as much as 30% for the rest of your retirement which can cost you thousands of retirement dollars.

You can receive the full amount of your ex-spouse’s Social Security benefit if he or she passes away. If your ex-spouse is deceased you can receive benefits as a widow or widower instead of spousal benefits. You qualify for the full amount of your ex-spouse’s retirement benefit, just as you would if you had still been married at the time of death. The rules are similar to those for spousal benefits:

  1. The marriage must have lasted at least 10 years.
  2. You must have attained your full retirement age (your benefit will be less if you file early).
  3. You must not have remarried before age 60. A marriage at or after the age of 60 will not affect your ability to qualify for this type of benefit.

In both types of Social Security benefits, it makes no difference whether your spouse has remarried one or more times. These benefits are yours if you qualify based on your age and marital status, even if there is a current spouse or widow who also collects benefits.

Still confused? Please contact our office for a consultation. We’ll help you clarify your options and find your best path forward. Social Security Benefit Planners 877-270-SSBP (7727) info@socialsecuritybp.com

Social Security Myth #3: Divorce Always Costs You!

MYTH: If you’re divorced, your only option is to file for Social Security based on your own work record.

Luckily for many divorcees, this isn’t the case at all. If you were married for over ten years, you can still file for benefits as if you were married.  This means that as in Myth #2, you can receive up to half the amount of your ex-spouse’s retirement benefit.

If you do not remarry and your ex precedes you in death, the Social Security Administration considers you to be widowed. As a widow or widower, you are eligible to receive the full benefit that your ex-spouse earned – just as if you had still been married at the time of his or her death.

Some divorcees worry that collecting the benefits to which they are entitled will cause resentment, either in the ex-spouse or his or her subsequent spouse (or spouses). The common assumption is that if one ex-spouse is receiving benefits, that will negatively impact the amount other current or previous spouses can receive, or even prevent them from receiving benefits at all.

There’s nothing to worry about, because everyone who can collect Social Security benefits based on a previous or current marriage to someone who is vested into the system does so independently. Even if your ex-spouse married several other people after you divorced, it doesn’t matter. If each marriage lasted over ten years, all the previous spouses – and the current one as well – will be able to collect the full amount of spousal or widower’s benefits.

If the marriage didn’t last for ten years, however, there is no benefit for an ex-spouse. Here is to your fantastic retirement!

Not associated with or endorsed by the Social Security Administration or any other government agency.