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7 Divorce-Related Considerations About Social Security

As gray divorce rates have increased for Baby Boomers, Social Security has become increasingly relevant. And as Social Security presents many choices for most retirees, the landscape becomes even more complex for divorcees.   

It’s not just an issue for people who are eligible for Social Security retirement benefits today. When it comes to the divorce process, some of the decisions you make today might impact your Social Security benefits down the road.  

Knowing this might not change what actions you take. But it is important to understand the effects that your divorce might have on your Social Security benefits.   

Here are 7 things you might want to know about Social Security after a divorce. 

1. You might be eligible for Social Security benefits based upon your ex-spouse’s earnings record. 

If you were married for 10 years or longer, you might be eligible to receive Social Security benefits on your ex-spouse’s work record, even if they have remarried.

According to the Social Security Administration website, you can claim benefits on your ex-spouse’s record as long as: 

  • You are unmarried 
  • You are age 62 or older 
  • Your ex-spouse is entitled to Social Security retirement or disability benefits 
  • Your Social Security benefit amount is less than what you would receive based upon your ex-spouse’s benefit 

You might also be eligible for Social Security benefits based upon your own earnings record.

If you’re eligible for both benefits, the Social Security Administration will give you the larger Social Security benefit amount based upon the greater of EITHER your own record, or your ex’s record.  You will always be entitled to the greater of the two, but not both at the same time.   

Keep this in mind, as the best available monthly benefit amount might change over time.

For example, you might file for benefits on your own work history. But you might be eligible for a survivor benefits on your ex-spouse’s record when when your ex-spouse passes.  

If that occurs, you might be eligible to apply for the higher benefit at a later date. However, you would still only be eligible to receive one benefit (the higher amount) at any single time. 

2. You don’t need your ex-spouse’s permission to file for Social Security benefits. 

When applying for Social Security benefits based upon your ex-spouse’s record, the Social Security Administration will ask you to fill out Form SSA-2. You may do this on the SSA website, over the phone, or by visiting your local Social Security office.   

Your ex-spouse does not need to be involved at any point in this process. However, you might need the following documentation: 

  • Birth certificate 
  • Proof of US citizenship or lawful alien status 
  • US military discharge papers (if you were on active duty before 1968) 
  • W-2 forms or self-employment tax returns for last year 
  • Marriage certificate 
  • Final divorce decree 

However, none of this should require you to coordinate your Social Security application with your ex-spouse. According to the Social Security Administration’s 5 Things Every Woman Should Know About Social Security

  • Clauses in divorce decrees in which a woman relinquishes her right to Social Security benefits on her ex-spouse’s record are never enforced. 
  • A divorced spouse’s benefits have ZERO impact on the ex’s benefit or her ex’s current spouse’s benefit. 

In other words, don’t delay applying for benefits just because you aren’t in touch with your ex, or because you don’t want to talk with them. 

3. You don’t need to wait until your ex-spouse files for Social Security benefits to file for your own. 

What your ex does has zero impact your ability to claim on your ex’s record.

Your own benefit as a divorced spouse is equal to one-half of your ex-spouse’s full retirement amount (or disability benefit), if you start receiving benefits at your own retirement age.  

This is the case regardless of when your ex applies for his or her own Social Security benefit.  

Also, you don’t need to wait until your ex files for Social Security to file for your own benefits against their record.

Assuming you qualify, you can apply for benefits based upon your ex’s work record, even if they’re still working. The stipulation is that you both must be at least 62 and divorced for at least 2 years before you apply. 

However, just because you can apply for benefits at age 62 doesn’t necessarily mean that you should do so.

4. It can pay to wait…to a certain extent. 

Social Security benefits can fluctuate based upon what age you are when you apply for them. 

Generally speaking, the longer you wait before you claim benefits, the higher your monthly payment will be. Conversely, the earlier you apply for benefits, the lower your monthly benefit payments will be.   

In order to understand how this impacts your spousal benefits, let’s first understand how this concept works for the worker’s (presumably your ex’s) benefits. 

Social Security retirement benefits are paid as a percentage of a worker’s primary insurance amount, or PIA. The PIA is the amount the worker is entitled to when they reach full retirement age (FRA).  

Depending on when you were born, your FRA will range from age 65 to 67.  The Social Security Administration has a chart that outlines FRA based upon the year of your birth

If a worker claims benefits at FRA, they will receive 100% of their PIA. This is considered full benefits.

If a worker delays taking Social Security, they accumulate delayed retirement credits at a rate of 8% per year, up until age 70. Conversely, for each year a worker takes benefits before FRA, their monthly payment is reduced by 8%.   

You’ll usually see this reflected in a Social Security Statement.  

Sample benefits statement 

Below is an example from an actual benefits statement.

At your current earnings rate, if you continue working until….

  • Age 62, your payment would be about…………………………….$2,026 a month
  • Your full retirement age, your payment would be about….$2,930 a month
  • Age 70, your payment would be about……………………………..$3,634 a month

As you can see in the above example, the difference in benefits between ages 62 and 70 are huge! The monthly benefits at 70 years of age are about 80% higher than the benefits at age 62.   

Even the difference between early filing and full retirement benefits (FRA) are significant.

Delayed benefits

If you file for benefits later, you might receive fewer payments over the course of your lifetime. But there is a break-even point. A break-even point is where your delayed (but larger) benefits overtake the earlier benefits. After that age, you’ll receive more money over the course of your lifetime by waiting until age 70.  

Usually, that ‘break-even’ point is around age 77 or 78. If you expect to live longer than that, you’ll usually be better off by waiting to collect benefits.  

However, there is no benefit to waiting past age 70. Delayed retirement credits do not accumulate past age 70.

Spousal benefits

This applies to spousal benefits too. But there is one key exception. You cannot accumulate delayed retirement credits for spousal benefits.  

This changes the dynamic a little bit.  While it still hurts you (in the long run) to claim early benefits, it does you no good to wait past age 66 to claim spousal benefits.

Many people make the mistake of assuming that waiting until age 70 will give them a bigger benefit. It does, if you’re claiming on your own work record, but not on your ex-spouse’s.

Keep this in mind, so you don’t lose out on those four years of benefits. 

Additionally, if you claim early benefits and are still working, your benefits might be reduced, depending on how much you earn. The Social Security Administration applies an earnings test to determine how much your benefits are reduced.

However, this doesn’t apply to people who have reached FRA.  Yet another reason to wait. 

5. If you’re not the only ex-spouse, you can still collect benefits. 

It doesn’t matter how many ex-spouses there are. Spousal Social Security benefits can be paid to each former spouse who qualifies on their ex’s record.   

If Elizabeth Taylor were alive today, each of her 7 husbands could have applied for Social Security benefits based upon her earnings record. However, only one (Richard Burton) actually met the criteria of having been married to her for at least 10 years. 

6. If you get remarried, the picture changes. 

If your ex remarries, your ability to claim benefits on your ex-spouse’s record doesn’t change. However, if you move on to a subsequent marriage, things change.

When you remarry, you lose the ability to claim benefits on your ex’s record, since you have a new spouse. However, you now will be able to claim benefits on your current spouse’s earning’s record.

7. If you get re-divorced, you might have even more options. 

Hopefully, the second marriage ends up better than the first. But if you get divorced again, you might be able to claim benefits on either ex-spouse’s record, or your own record, whichever is better.  

This assumes that in each case, you meet the criteria. Specifically you have to have been married to each spouse for at least ten years, and you have to have been divorced for the previous two consecutive years.

Conclusion 

Most people understand that the divorce process can be a taxing experience. From a financial planning perspective, Social Security is a complicated program, and it’s easy to make costly mistakes. When it comes to navigating Social Security as a divorced person, it can be even more frustrating and challenging. 

However, you owe it to yourself to ensure you’re on the best financial footing as you prepare for the next stage of your life.  Making sure you and your soon-to-be ex-spouse are on the same page is the best way to do just that.