The Gray Divorce Podcast: Episode 3 Social Security and Divorce

In this episode I deal with Social Security and divorce and how important it is for late life divorcees to maximize their Social Security benefits after divorce.

What are the basic rules of eligibility to claim Social Security on your ex-spouse’s record?

1. You have to have been married for 10 consecutive years or longer even if the marriage ended a long time ago.
2. You and your ex-spouse have to be at least 62 before you can claim as an ex-spouse.
3. To collect on your ex-spouses record, you must not be remarried
4. You have to have been divorced for two years or longer, or your ex-spouse must already be claiming retirement benefits.

It's important to note that if you qualify as an ex-spouse based on this criteria, your retirement benefit would be half of your ex-spouses primary insurance amount as long as you claim at your full retirement age. You could claim as early as 62 but you will get less than you would claiming at full retirement age.

I always recommend visiting the Social Security website to determine exactly what you or your spouse's full retirement age is. For those born between 1943 and 1954, the full retirement age is 66 and for those born 1960 and later the full retirement age is 67. It's a little bit more complicated for those born between 1955 and 1959 so please visit the Social Security Administration web page for specifics.

What happens if your ex-spouse dies?

You qualify for survivor benefits on the work record of a late ex-husband or ex-wife if:

• The marriage lasted at least 10 years.
• You are at least 60 years old (at least 50 if you are disabled), or you are caring for a child from the previous marriage who is either under 16 or became disabled before turning 22 (in which case there is no age or length-of-marriage minimum).
• You also qualify for survivor benefits on the work record of a late ex-husband or ex-wife if you are single or, if you have remarried, you did not do so until after you turned 60 (50 if disabled).

For social security and divorce it is it the same with widows and widowers: you are entitled to receive 100% of the amount you're late ex was getting from Social Security when he or she died if you wait until you reach the full retirement age for survivors.

This podcast also deals with a couple common misperceptions about Social Security and divorce and claiming benefits based on your ex-spouse’s record.

 

Transcript

Announcement: [00:00:00] Welcome to The Gray Divorce Podcast, hosted by divorce financial analyst and retirement planning counselor Andrew Hatherley. Join Andrew and guest experts as they help late life divorcees build the financial and mental foundation for a meaningful future. There is life after divorce. Now on to the show.

Andrew Hatherley: Hi every. Today on the Gray Divorce Podcast, we're going to be dealing with the issue of Social Security benefits and divorce. In particular, how important it is for late life divorcees to get it right and maximize their social security benefits after divorce. We'll be discussing how spousal or better said ex spousal social security benefits work in divorce, the basic rules of eligibility.

What happens if you get remarried, what happens if your [00:01:00] ex-spouse dies? And a few common misperceptions about social security and divorce. To begin, social security benefits are one of three key components of retirement income. So social security is particularly important for people going through divorce who may not have access to a pension or significant retirement savings in IRAs or 401ks.
403b, 457 plans, things like that. If you only take away one item from today's podcast, it would be this, if one spouse qualifies for social security benefits based on an ex-spouse's record, it's important that this be taken into consideration when negotiating the divorce settlement, and doing financial planning for life after divorce.

I always make sure to discuss social security with [00:02:00] attorneys when I see that it could be an important. obviously in a high net worth divorce where a couple is splitting large retirement accounts or lots of home equity, it's not going to be as important an issue, but in situations where there's, where there's not as much money to go around, it's wise to get a handle on social security benefits.

Before we get into today's convers, I'll remind you that resources and sources for today's podcast are available on my website, TranscendRetirement.net, and that today's discussion draws a lot of useful information from the Social Security Administration website, ssa.gov, and the A A R P website, AARP.org.

Okay, so what are the basic rules of eligibility to claim Social Security on your ex-spouse's? One, you and your ex must have been [00:03:00] married for 10 consecutive years or longer even if the marriage ended 30 years ago. Funnily enough, the average duration of a marriage is somewhere between eight and nine years.

And I've worked with people going through divorce who've been married for nine years and, uh, nine months, nine three quarter years, and I've asked. , you know, can you hang on for another three months? Particularly if they're getting to that 10 year mark. If getting to that 10 year mark would make them eligible to get a spousal divorce benefit significantly higher than their own two, both you and your ex must be at least age 62 before you can claim as an ex-spouse three, to collect on an ex's record, you must not be remarried.

Sometimes we joke here that the trick is if you. Married. Married into a higher economic bracket, and four, you and your ex must be [00:04:00] divorced for two years or longer, or your ex must already be claiming retirement benefits. So if you qualify as an ex-spouse based on these four criteria, your retirement benefit would be.

Of your ex's primary insurance amount, otherwise known as pia, so long as you claim at your full retirement age, also known as F R A. Let me say that again. If you qualify as an ex-spouse based on the FRI four criteria I just noted, your retirement benefit will be half of your ex's primary insurance amount, so long as you claim at your full retirement.

As an example, let's say your ex would receive $2,000 a month social security benefit at their full retirement age. You would be entitled to receive a benefit of a thousand dollars a month or half of that amount that [00:05:00] they receive. The P i A is the benefit of person would receive if he or she elects to begin receiving retirement benefits at his or her normal full retirement.

You could claim as early as 62, but you get significantly less than you would claiming at your full retirement age. Now, consider this, you'll only get a retirement benefit based on your ex's wage record if it is a higher benefit amount than you would receive based on your own wage record. So if your social security benefit is $1,200 a month, Using the example above, that's more than half of $2,000, which is a thousand dollars a month.

So you wouldn't receive a benefit based on his, that just wouldn't make sense. So I'm gonna talk a little bit about full retirement age. As you probably know, you can start receiving your own Social security [00:06:00] retirement benefits as early as age 62. However, you are entitled to full benefits when you reach your full retirement.

If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase. Unlike retirement benefits, spousal benefits do not continue to grow by 8% per year up to age 70 that bears repeating. Divorce. Spouse benefits don't continue to grow by 8% per year up to age.

It is important to note that your former spouse doesn't have to be collecting his or her retirement benefits for you to claim ex spousal benefits.

However, if this is the case, the divorce must be at least two years old. There's no two year requirement. If your ex is already receiving benefits, the most you can collect in divorce, bus benefits is 50% of your former maid's primary insurance.[00:07:00] the monthly payment he or she is entitled to at full retirement age. And as I said before, this is important. Unlike retirement benefits, spousal benefits don't continue to grow by 8% per year. Up to age 70, I. I suggest visiting the social security website to determine exactly what you or your spouse's full retirement age is for those born between nineteen forty three, nineteen fifty four.

The full retirement age is 66, and for those born 1960 and later, the full retirement age is 60. For those tricky years between 1955 and 1959, it's going to be 66 years in a certain number of months. So as I say, visit the Social Security Administration webpage for specifics. The earliest you can apply for divorce spouse benefits is three months before your 62nd birthday.

You can [00:08:00] do it online or by phone by making an appointment at your local Social Security office. Fyi. The Social Security Administration's customer service number is 1 807 7 2 12 13. I'll mention that again, just to have, just, just make sure that you. A good book to read while you're waiting on hold if you give them a phone call, cuz you never know how long it's gonna take.

When you speak to the social security office, you may need to provide documents to show eligibility, including proof of US citizenship or legal immigration status, a marriage certificate and a divorce decree. You must also provide your former spouse's social security number or if you don't have that, his or her date of birth.

Place of birth, and parents' names. So Social Security can locate the relevant work record [00:09:00] now if you are already receiving retirement benefits on your own work record. You can also claim any ex spousal benefits you are eligible for, but social security is not going to pay you both combined. You'll receive whichever amount is higher and no more.

Any benefits you receive as a divorce spouse do not affect Social Security benefits paid to your ex or their current spouse if they've remarried. So don't worry or listen to nonsense that you are claiming on his or her record affects the benefits that they get. If your ex-spouse is deceased, you may be entitled to survivor benefits under different eligibility rules, and we'll get to that in a minute.

I just want to talk briefly about a special provision that affects a minority of people, but it's called restricted application. and this is a way to claim ex spousal benefits alone and postpone [00:10:00] claiming your retirement benefits until age 70, thus earning that 8% annual delayed credit from full retirement age to age 70, and potentially get a higher benefit than your divorce benefit.

This is a pretty nice deal, but the catch is you need to be born between January 2nd, 1950. Divorced spouses who don't qualify for a restricted application are subject to what's called social securities deemed filing rule. Under this regulation, individuals filing for retirement benefits who are also eligible for spousal benefits must claim both at the same time.

You won't get both benefits combined. Social security will pay the higher of the two benefit amounts. As always, there are exceptions and it can get complicated. That's why it's always wise to do your research and speak directly to the Social Security [00:11:00] administration. For instance, there is one more exception to deemed filing for divorced spouses regardless of when you were born.

You can file a restricted application if you are entitled to Social security disability payment. And deem filing does not cover survivor benefits. If your former spouse is deceased, you can apply for and collect benefits on his or her record and delay your own retirement claim. Okay, so what happens if your ex dies?

Well, you qualify for survivor benefits on the work record of a late ex-husband or ex-wife. If. once again, the marriage lasted at least 10 years. You are at least 60 years old and at least 50 years old. If you are disabled or you are caring for a child from the previous marriage who is either under 16 or [00:12:00] became disabled before turning 22, in which case there is no age or length of marriage.

You also qualify for survivor benefits on the work record of a late ex-husband or ex-wife. If you are single or if you have remarried, you did not do so until after you turned 60. Once again, 50 if disabled. As with widows and widowers waiting until you rece reach the full retirement age for survivors entitles you to receive 100% of the amount your late ex was getting from Social Security when he or she died.

That's 100%. If the deceased never claimed benefits, you'll get what he or she was eligible to receive. In most cases, claiming survivor benefits before you reach full retirement age reduces the amount of your benefit. If you've already claimed Social Security on your [00:13:00] own, you can still apply for Survivor benefits, but once again, you will not receive both benefits combined.

When someone qualifies for two benefits, social Security pays the higher amount. Now keep this in mind. If your late ex-spouse took reduced benefits by filing for social security early, you may qualify for the highest possible share of those benefits that is the highest possible survivor benefit before your own full retirement age.

If this is your situation, Call the Social Security Administration once again, 1-800-772-1213 to see how it will affect your survivor benefit. Once again, know that survivor benefits paid to you as a divorce spouse do not affect payments to the late beneficiary's widow, or widower, or to other former spouses.

Okay. [00:14:00] Let's end with a couple common misperceptions about claiming social security benefits on your ex-spouse's record. Here's a good one. The idea that if you claim against your ex's record, his or her own retirement benefit will be reduced. This is not so one's ex's claim does not reduce or affect the other ex's benefit in any way under the Social Security program, all amounts paid to beneficiaries.

Calculated benefits based on a specific starting point. Multiple people's benefits can use the same starting point. Another misperception is that your benefit could be reduced or denied if your ex-spouse claimed social security in a certain way. No, just know that your ex has no influence over your benefits.

I've read in my research that some people have signed divorce [00:15:00] degrees, relinquishing their rights to social security on their ex's record. Apparently, these types of clauses in divorce decrees are rarely enforced, as I noted before. When you are ready to claim your social security benefit, you simply make an appointment with your local Social Security office and bring documents that prove the marriage and divorce.

They will calculate your benefit options and assuming you meet the criteria discussed earlier, you'll receive the higher benefit based on your ex-spouse's primary insurance amount. A similar misconception is that you must discuss your claiming plans with your. No, you don't have to do that, nor do you need your ex's permission.

He or she will never know whether your retirement benefit was based on his or her work record. So long as you've met up the other rules, it's your benefit for your retirement. Okay? You'll have gathered [00:16:00] by now that social security and divorce is a rather complicated subject, and you may be in a situation that I didn't address in this overview.

As with anything else in divorce, it pays to be educated about the subject early in the process. Do your research, contact the Social Security administration. Mention your concerns to your divorce attorney, and reach out to a financial advisor who specialize. Specializes in divorce. Someone like me. Until next time, stay.

Announcement: Thanks so much for tuning into this episode of The Gray Divorce Podcast. To learn more or get in contact with your host, you can visit Andrew's website at TranscendRetirement.net. Also, please feel free to rate, subscribe, and leave a review wherever you listen to your podcasts. That helps others find the show and we greatly appreciate it.

Thanks again for listening, and we'll catch you in the next episode.[00:17:00]

Andrew Hatherley: Information provided is educational only and should not be construed as legal or tax advice. Each situation is unique and should be discussed with your tax or legal advisor prior to implementation. Andrew Hatherley is not an attorney and does not provide legal advice. Information provided is financial in nature.

Advisory services offered through Hatherley Capital Management LLC and Divorce Financial Analysis Services offered through Wiser Divorce Solutions and affiliated company.