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Divorced-Spouse Social Security Benefits: Who Can Claim Them and How
Lady Nancy Astor is said to have told Sir Winston Churchill: “Winston, if you were my husband, I'd poison your tea.” His reply: “Nancy, if I were your husband, I'd drink it.”
We’ve talked in past articles about spouses coordinating their Social Security benefits to optimize their household income. But not everyone stays married for a lifetime. To cover all possible scenarios, we must also discuss coordinating your benefits with those of an ex-spouse.
Divorced-spouse retirement benefits: who qualifies?
Access to Social Security benefits is not an item that is negotiated as part of a divorce settlement. In fact, both individuals can access spousal benefits just like a married couple if:
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- The marriage lasted 10 years or more
- The divorced individual is currently unmarried and divorced for longer than one year
- The ex-spouse is entitled to Social Security retirement benefits and is at least age 62
- If divorced for fewer than two years, the ex-spouse needs to have filed for his or her own retirement benefits
How divorced-spouse retirement benefits are claimed
Here’s an example: Jane has a retirement benefit of $1,600 and her ex-husband, Jack, has a full retirement age benefit of $2,642; they are the same age and are divorced after more than 10 years of marriage. Jack has since remarried.
When Jane turns 66, she can restrict her own retirement benefits of $1,600 and take divorced-spouse benefits (based on Jack's work history) of $1,321 (if she reached age 62 by the end of 2015, per the Bipartisan Budget Act of 2015). Although Jack has remarried, his marital status doesn't affect Jane’s receipt of divorced-spouse benefits, nor does Jane’s receipt of divorced-spouse benefits affect Jack and his second wife in any way — they are not even notified of Jane’s collection of divorced-spouse benefits.
When Jack remarried he lost access to divorced-spouse benefits based on Jane’s work history, while Jane, at age 70, can stop her $1,321 of divorced-spouse benefits and take her maximized retirement benefit of $2,112.
Divorced-spouse survivor benefits
Divorced-spouse survivor benefits work like survivor benefits for married couples if the marriage lasted at least 10 years. An individual with access to a retirement benefit for his or her own work record and access to a survivor benefit for an ex-spouse’s work record can start receiving his or her own benefits at age 62, then switch to a survivor benefit at age 66.
As an alternative, that person could start the survivor benefit at age 60 and switch to his or her own benefit at age 70, taking a smaller initial benefit while another, larger benefit grows unaffected. This will be the permanent benefit received for the rest of that person’s life.
So if our friend Jack dies, Jane may be able to access his retirement benefit in the form of a divorced-spouse survivor benefit, possibly more than doubling her total Social Security benefit. She maintains access to this survivor benefit even if she has remarried and the second marriage came after age 60.
A divorced spouse can obviously benefit greatly from survivor benefits from a previous married partner. If going through a break-up with a higher earning individual, it may be best to illustrate in the divorce decree the importance of both parties maximizing their retirement benefit for the former partner’s possible future survivor benefits.
How we can help
For divorced individuals who have not remarried, whether male or female, the effect of only one income source on retirement cash flow increases significantly. Singles with access to additional Social Security benefits from a previous marriage need a strategy to manage their benefits, just like their married counterparts. Always consult with your financial advisor and a tax professional. They can assist you with a goals-based financial planning process that helps you create a vision for the next phase of your life.