Divorce can be- and often is- an emotionally and financially traumatic time for all parties involved. When the union that was supposed to last forever is broken, there are a lot of pieces that need to be picked up.
If you’re a woman who has found herself in this position, you may find yourself becoming more nervous financially as you near retirement. We speak with a number of women clients who are still trying to get back on solid financial ground after divorce, and one of the main concerns is their stream of income in retirement years. If you were planning to rely on spousal Social Security benefits as a way to supplement your income during retirement, it’s important to understand you may still be eligible to receive these benefits.
According to the Social Security Administration (SSA.gov), here’s generally what you need to know:
- If you are divorced, but your marriage lasted 10 years or longer, you can receive benefits on your ex-spouse’s record (even if he or she has remarried) if:
- You are unmarried;
- You are age 62 or older;
- Your ex-spouse is entitled to Social Security retirement or disability benefits; and
- The benefit you are entitled to receive based on your own work is less than the benefit you would receive based on your ex-spouse’s work.
Please note that your 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 full retirement age. It is possible to begin ex-spousal benefits as early as age 62, but because full retirement age is between 66-67 (depending on the year you were born), these benefits can potentially be greatly reduced. In order to get the most out of your benefits, it’s best to wait until full retirement age if possible.
A few of the more detailed stipulations:
- If you remarry, you generally cannot collect benefits on your former spouse’s record unless your later marriage ends (whether by death, divorce or annulment). Another exception is if your ex-spouse passes away and you remarry after age 60, then you can claim your ex-spouse’s benefit if it’s larger than your own.
If you’ve been unlucky in love and been married and divorced twice with each marriage lasting longer than 10 years, then you actually have a choice between which benefit to claim. If you’re at full retirement age (again, between 66 – 67 depending on the year you were born) you can actually choose which ex-spousal benefit is larger as long as your benefit is less than half of theirs if they’re still alive or less than 100% of your ex-spouse’s benefit if he or she is deceased.
- If your ex-spouse has not applied for retirement benefits but can qualify for them, you can receive benefits on his or her record if you have been divorced for at least two years.
- If you are eligible for retirement benefits on your own record and divorced spouse’s benefits, you will be paid the retirement benefit first. If the benefit on your ex-spouse’s record is higher, you will get an additional amount on your ex-spouse’s record so that the combination of benefits equals that higher amount. If you were born before January 2, 1954 and have already reached full retirement age, you can choose to receive only the divorce spouse’s benefit and delay receiving your retirement benefit until a later day. If your birthday is January 2, 1954 or later, the option to take only one benefit at full retirement age no longer exists. If you file for one benefit, you will be effectively filing for all retirement or spousal benefits.
- If you continue to work while receiving benefits, the retirement benefit earnings limit still applies. If you are eligible for benefits this year and are still working, SSA.gov has an earnings test calculator you can use to see how those earnings would affect your benefit payments.
- If you will also receive a pension based on work not covered by Social Security, such as government work, your Social Security benefit on your ex-spouse’s record may be affected.
If you have additional questions on how divorce may impact your Social Security spousal benefits, it’s best to speak to a financial professional who can assist you. Don’t assume that because you are divorced you’re not entitled to the benefits that may help sustain your income stream in retirement. Be sure to know all the facts before making any assumptions in order to set yourself up for a solid future financially.