With the United States having one of the highest divorce rates in the world, we’re frequently asked by clients how divorce impacts their Social Security benefits.
In this article, we’ll cover some of the important considerations that you need to take into account if you are divorced or thinking of getting divorced in order to make sure that you maximize your Social Security.
10 Year Marriage Requirement
The first question you need to ask yourself is when you were married, we’re you married for at least 10 years? If the answer is no, you are technically considered single from the Social Security Administration’s perspective. Singles have many important Social Security options as well, but as we’ll discuss, those that are divorced (after at least 10 years of marriage) have many more options.
So if you’ve answered “yes” to the above question, you are considered divorced which provides you with important ex-spousal and survivor benefit options in most cases.
Being “Independently Entitled”
If you’re divorced and have been so for at least a minimum of two years, I have good news for you. You’re what’s called “independently entitled” meaning that as long as your ex-spouse is eligible for Social Security benefits by being at least 62 years old, you don’t have to wait for him or her to file for benefits in order to potentially be entitled as an ex-spouse.
If you’ve been divorced for less than two years, then whether you can be entitled to an ex-spousal benefit will still depend on whether your ex-spouse has filed for benefits or not.
Most divorcees are “dually entitled” which means that if they have worked and have their own Social Security earnings record, they will be entitled to benefits both on their own record and also as a divorced spouse.
This is where it gets complicated and because of this dual entitlement, deciding which record to claim benefits on and at what point in time is critical to ensure that you don’t leave money on the table. Again, the earliest that you can claim a Social Security retirement benefit is at 62 and the latest that you would want to is at 70. However, with eligibility on both records, you need to determine exactly when to claim and on which record.
Never Worked? You Can Still Receive an Ex-Spousal Benefit
We’re often asked whether a stay at home parent or someone with little earnings history is eligible for ex-spousal benefits. The answer is yes as long as he or she meets the other criteria mentioned above.
Even if you’ve never worked, as long as you were married at least 10 years and are otherwise eligible, you’re entitled to benefits as an ex-spouse and also eventually as a survivor.
The Bottom Line
Properly coordinating and timing benefits is critical for everyone that needs to claim Social Security. Because of the importance of pursuing strategies that maximize spousal benefits, increase delayed retirement credits, and avoiding some of the pitfalls that are far too easy to make without the proper guidance and understanding. Whether any of the strategies above are right for you requires careful analysis as each situation is different.
Until next time,
Matthew Allen is the Co-Founder/CEO of Social Security Advisors and creator of the new course Maximizing Your Social Security produced in conjunction with Weiss Educational Services. Matthew has helped thousands of seniors maximize their Social Security benefits and avoid costly mistakes when filing. Matthew has been at the forefront of financial services for over a decade. In addition to co-founding Social Security Advisors, Matthew also founded The Universal Group of Companies, a private investment firm, in 2004. From 2000 to 2004, Matthew was a NYSE Market Maker with LaBranche & Co., a Fortune 500 New York Stock Exchange firm.