Divorce can be difficult and it can seriously strain your finances. The best way to get past the big bumps is to identify them and come up with a plan well before you head to court. One set of issues to watch for involves your Social Security benefits.
Sam Bone of Dani V. Bone and Sam D. Bone, Attorneys at Law, in Gadsden, Ala., specializes in divorce and Social Security law. In his part of the world, many people rely on Social Security benefits to survive.
“The first question many clients ask me, is ‘What is going to happen to my social security benefits if we divorce?’" said Sam Bone. "These people want to know if they can financially survive without the other spouse before they make the leap of faith to divorce.”
Read on to find out the critical ways a divorce might have an impact on your Social Security benefits.
1. You Can Claim Social Security Benefits Based on Your Ex-Spouse’s Income
When you marry, you have two possible ways of getting Social Security retirement benefits. You can earn enough income yourself to qualify for personal benefits, or you can claim benefits based on the income of your spouse. Even if you have never worked in your life, you can claim your spouse’s retirement benefits if you are at least 62 years of age and your spouse is eligible to receive benefits.
Bone said that many of his clients believe that if they divorce, they are disqualified from getting Social Security benefits based on their ex-spouse’s income. However, this is not the case. If you divorce, Bone said, you can receive benefits based on your ex’s income if:
- Your spouse is eligible for benefits
- Your marriage lasted 10 years or longer
- You are unmarried
- You are at least 62 years old, and
- Your benefit based on your own work is less than the benefit you would receive based on your ex-spouse's work.
Don’t Miss: 40 Social Security Tips for 2017
2. Your Benefits as an Ex-Spouse Increase if You Wait to Claim Them
How much will you get if you claim Social Security benefits based on your spouse’s income? That depends on your age when you claim them.
You can first collect Social Security benefits at age 62. But you will get more per month if you wait until “full retirement age” (FRA) — also known as "normal retirement age" — to retire. That age can range from 65 to 67 years old, depending on the year you were born. You can still start getting benefits at age 62. But if you start collecting benefits before FRA, they are reduced a fraction of a percent for each month before your FRA. If you wait until after FRA to start collecting benefits, your benefit amount increases for each month you wait until you are 70.
This system applies to people who claim benefits as a former spouse, too. If you wait until your own FRA, you’ll get a full 50 percent of what your ex will get when he reaches FRA. If you take them earlier, you get less.
For example, if you were born in 1954 and you apply at age 62, you’ll get 35 percent of his or her FRA benefits. At age 65, you’ll be eligible for 45.8 percent. You’ll want to figure out the best moment to start taking your Social Security benefits, especially if you are relying entirely on Social Security to pay for your retirement living. Use the Social Security Administration's calculator to determine the best timing to claim your benefits.
3. Your Ex Is Not Notified if You Apply for Benefits
One thing many people worry about when they apply for Social Security benefits based on their former spouse’s earnings is whether the ex-spouse will be notified. However, according to Beth Andersen, a divorce attorney with Andersen Law PC in Littleton, Colo., your ex will not be notified when you apply. Likewise, your ex will not be notified if you remarry and thus stop receiving his or her benefits.
It’s also important to realize that you are not taking money from your ex-spouse's pocket by applying for benefits. Benefits paid to one ex-spouse do not affect those paid to the worker, the current spouse or other ex-spouses, Andersen said.
“More than one ex-spouse can receive spousal benefits on the same worker’s record,” she noted. “To my knowledge, the Social Security Administration has not yet enacted an ex-spouse cap. It allows an unlimited number of people to marry a high-wage earner — one at a time, of course! — and draw on their high insurance level.”
Andersen also publishes a blog called Divorce 101, offering tips to people who are ending a marriage.
4. You Might Get Spousal Benefits While Your Individual Benefits Grow
For some years, one option in Social Security law allowed you to claim spousal benefits while allowing your own individual benefits to grow. Essentially, you would claim a spousal benefit when you were eligible, then switch to your own higher benefit when you turned 70. You could do this even if your marriage had ended.
Under recent changes to the law, this has been phased out. Now, under the new Social Security rules, that option is only available to people born on or before Jan. 1, 1954. Ex-spouses born before that date can file a restricted claim for spousal benefits on the other's earnings while allowing personal benefits to grow.
If you were born after that date, you don’t have that option. When you apply for Social Security benefits, you are deemed to file for all available benefits. The Social Security Administration (SSA) pays you the higher of the individual or spousal benefits.
5. You Might Be Able to Claim Survivor Benefits if Your Ex Dies
If you are married and your spouse dies, you and your children might be entitled to survivor benefits. Survivor benefits can be paid to a deceased worker’s spouse, minor children and dependent parents. They can also be paid to an ex-spouse in certain cases, and can be up to 100 percent of the deceased worker’s benefits.
Once you are divorced, you are eligible for survivor benefits if your ex dies, providing:
- Your marriage lasted 10 years or more, or
- You are caring for a child who is under age 16 or disabled, and who gets benefits on the record of your former spouse.
Your survivor benefits might be impacted or eliminated if you remarry, if you become eligible for Social Security benefits on your own income or if you receive a pension not based on work covered by Social Security. If you remarry after the age of 60, you can still be eligible for survivor benefits.
New Jersey-based divorce attorney Jef Henninger explained what happens if an ex-spouse is entitled to both individual benefits and “auxiliary benefits,” including benefits based on an ex’s earnings or survivor benefits. The SSA first determines which is more, the auxiliary benefit or the individual benefit. If the latter, the SSA pays the individual benefit. If the former, the SSA pays the entire individual benefit plus a supplement equal to the difference between the benefits.
6. You Might Get Survivor Benefits While Your Individual Benefits Grow
If your ex-spouse dies before you collect Social Security benefits, you can apply for survivor benefits. Once your personal benefits have grown to their maximum when you turn 70, you can switch to those benefits. For example, let’s say you are eligible for benefits as the surviving ex-spouse of a worker and also as a working person yourself. You can make an application for survivor benefits only now, allowing your individual benefits to grow until you reach age 70, and then switching over.
7. You Might Not Lose Social Security Benefits From Your Ex if You Remarry
You can get spousal benefits based on your ex-spouse’s earnings as described above. However, in order to qualify for those benefits, you must not be remarried. You can receive the spousal benefits if your ex-spouse remarries. But when you remarry, the spousal benefits cease.
However, you can resuscitate those lost benefits if your second marriage ends. No matter how your marriage ends, the minute you are no longer married you can reapply for benefits based on your former spouse’s earnings. That means that you can reapply for ex-spouse benefits if you and your second spouse divorce, if your second spouse dies or if a court annuls your second marriage.
If both of your marriages end in divorce, you might have new Social Security benefit options. If your first and your second marriage each lasted over 10 years, you might qualify for benefits as the ex of two different former spouses, although you can only claim one of those benefits. The SSA awards you the highest survivor benefit to which you are eligible.
Find Out More: 20 Unsettling Things You Need to Know About Social Security