My latest article, 5 Ways Divorce Could Impact Your Social Security Benefits, is now featured at MSN Money. In becoming our resident Social Security expert, I’ve learned that the math of Social Security begins as basic arithmetic and quickly become complex algebra. Nowhere is this complexity more apparent than in the case of divorced spouses.
If you’re getting divorced or remarried, “for better or for worse” and “for richer or for poorer” can have real meaning for Social Security benefits. Most retirees are uninformed about how Social Security benefits are calculated, and often overlook how their change in marital status affects this critical retirement asset.
The article highlights five aspects of Social Security that every divorced spouses should be aware of:
1. If you get a divorce and your marriage lasted nine years and 11 months, you’re out of luck. But if your marriage lasted 10 years or longer and you’ve been divorced for at least two years, you’re eligible for a divorced spousal benefit.* You can claim either your own benefit or your ex-spouse’s benefit, whichever is higher.
2. You can also claim both benefits. Many divorced spouses optimize their Social Security by beginning their divorced spousal benefit at age 66, which is currently the full retirement age (FRA), and then switching to their own benefit at age 70.
3. If you begin claiming divorced spousal benefits between age 62 and FRA, you don’t get the opportunity to restrict your filing. Those who file for early benefits are required to take the higher of personal or spousal benefits. In fact, if you work during this time, your benefit could be adjusted downward due to the so-called earnings limit.
4. Getting remarried after a divorce generally means that you lose whatever benefit you may have been eligible for from your former spouse. For most people, this might not be a big deal because it only takes a year of remarriage to become eligible based on your new spouse’s record.
5. You don’t need to wait for your divorced spouse to file for benefits to become eligible for spousal benefits. If you are both at least age 62, which is the earliest you are eligible for personal or spousal benefits, and you have been divorced for at least two years, Social Security allows you to make an independent filing decision.
Those who are looking for a fun narrative to understand how divorce and remarriage affects Social Security should read my tongue-in-cheek consultation with King Henry VIII.
5 Ways Divorce Could Impact Your Social Security Benefits