by Sandy Loewen
What All Divorcees Should Know About Social Security
When it comes to retirement planning, we get a lot of questions about Social Security. Will it be there for me when I retire? How much will I get? How does it work? What if I’m divorced? Am I still eligible for my ex’s Social Security?
While we can’t answer all of these questions in this article, we do want to address the latter: What if I’m divorced?
At Montgomery Taylor Wealth Management, we work with many divorcees. If you too have experienced a divorce, here’s what you should know about Social Security, and more specifically, Social Security Sonoma County.
It’s never too early to start planning for your future. Contact Montgomery Taylor Wealth Management and get the conversation started.
Am I Eligible to Receive My Ex-Spouse’s Social Security Benefits?
The short answer to this question is yes, as long as you were married to that person for 10 years or more, you can receive benefits on your former spouse’s Social Security record.
It needn’t have been a recent divorce, but the 10 years and over rule is firm. If you were married for less than that, you aren’t eligible for your ex spouse’s Social Security benefits.
That said, the Social Security Administration (SSA) has established many rules and regulations that every divorcee should be aware of, both to obtain their benefits and to maximize them. A financial advisor can help you with this.
Is My Ex-Spouse Eligible for Social Security Benefits?
First, you need to make sure your ex-spouse is eligible for Social Security benefits. While most Americans are, there are specific requirements.
To receive benefits, you need to have worked enough to obtain the minimum required work credits. For people born in 1929 or after, that’s 40 work credits. The SSA limits the maximum credits workers can get in one year, to four credits. So, in other words, you have to work at least 10 years over your lifetime to be eligible for Social Security benefits at retirement. They needn’t be consecutive years.
Workers obtain one credit for each $1,360 in covered Social Security earnings. Earnings of $5,440 in one year will achieve the maximum four credits for the year. The figures required to earn credit may change slightly each year.
Are Their Requirements for Me?
If your spouse is eligible to receive Social Security benefits at retirement and your marriage was 10 or more years in duration, to receive benefits as a divorced spouse, you must be:
- 62 years of age or older
- Currently unmarried
If you remarry after a divorce, you can still claim benefits from a divorced spouse as long as your subsequent marriages have ended (through divorce, death or annulment).
For example, let’s say Person A is married to Person B for 11 years. Person A then divorces Person B and marries Person C. Person A and Person C get divorced after five years. Person A can still claim divorced spouse benefits on Person B’s Social Security.
Here’s another stipulation:
If you are eligible to receive Social Security benefits from your own work record, the benefit you are entitled to has to be less than the benefit you’re entitled to get from your ex-spouse’s work record. If this amount is not less, you aren’t eligible for a divorced spouse’s benefit. (If you are not eligible to receive Social Security benefits at retirement, this requirement doesn’t apply.)
Not sure what you are entitled to receive from your own record? The SSA calculates estimated benefits every year for everyone with a covered work record. If you aren’t receiving statements of your estimated benefits, you can access them here.
What Will I Receive?
If you have met all these requirements, your benefits as a divorced spouse will be 50 percent of your former’s spouse’s Social Security benefits, as long as you retire at your full retirement age. This means that if your ex-spouse is eligible to receive $24,000 each year at retirement in Social Security benefits, or $2,000 per month, you will be eligible to receive $1,000 per month.
What’s your full retirement age? This is an important detail to know, because many benefit calculations are based on it. This age is determined by your birth year. It’s currently 66 for people born between 1943 and 1954, and 67 for people born in 1960 or later. Between 1955 and 1959, a person’s full retirement age is 66 and a certain number of months. Check here for you specific date.
If you are eligible for both your own Social Security benefits and your ex spouse’s, the SSA pays on your own record first. If the benefits on your former spouse’s record is higher, the SSA adds an amount onto your former spouse’s record so that the combination of benefits will be equal to the higher amount.
What Happens If Your Ex-Spouse Isn’t Drawing Social Security Benefits Yet?
Although everyone becomes eligible for full retirement benefits at their full retirement age, some people delay taking them to maximize the amount of money they get. The amount increases about 8 percent every year between your full retirement age and the age of 70, after which they no longer increase.
As long as your ex-spouse is eligible and you have hit your full retirement age, you can receive benefits on their record if you have been divorced for a minimum of two continuous years. The date that your ex-spouse applies to receive benefits or actually starts getting them doesn’t affect your receipt.
The amount of benefits your ex-spouse receives or is eligible to receive is never affected by your receipt of divorced spouse Social Security benefits.
You may have heard of a strategy that allows you to take only a divorced spouse’s benefit and delay receiving your own retirement benefits until a later date. This allows you to maximize your benefits by delaying until the age of 70, when they will have appreciated.
That strategy is now only available to people who were born before Jan. 2, 1954 and have reached their full retirement age. If you’re eligible, it can be an advantageous financial strategy. Talk with a financial advisor to understand your options.
Does Other Income in Retirement Affect the Divorced Spouse Benefit?
Some income in retirement may affect the divorced spouse benefit. For example, if you receive a pension and that work is not covered by Social Security (working for the government, for instance), the amount may be subject to the Government Pension Offset (GPO).
Once you calculate your Social Security benefits, you may want to read another recent blog post: Are Your Retirement Benefits Enough? Ask Yourself These 3 Questions.