MONEY QUESTIONS by Matthew Illian, CFP®
Q: My husband and I divorced several years ago, and I am about to turn 62 in December. Since my ex-husband (he’s a year older) and I parted ways, we don’t talk. So I have no idea if he has retired yet or if I am eligible for a Social Security benefit based on his earnings record. Can you please explain the Social Security benefits due to a divorced spouse?
Searching for Security
Many are unaware that divorced spouses have more flexibility to maximize their benefits than their married counterparts. Too many people jump to get their benefits as early as possible, and on average, they give up tens of thousands of dollars of lifetime benefits.
First we need to start with some ground rules to qualify for spousal benefits as a divorcee (even if your husband has already remarried).
1. Your marriage lasted at least 10 years.
2. You are not currently remarried.
3. You are at least age 62 (unless you are also disabled).
If all three are true, start by setting up a meeting with the Social Security Administration to find out what benefit amount you are eligible for as a divorced spouse. You will only need a copy of your divorce decree and your ex-spouse’s Social Security number. Your claim will not affect your ex’s benefit in any way. In fact, Social Security will not notify your former spouse at all.
The extra flexibility available to a divorced spouse is that he or she does not need to wait until an ex-spouse files for Social Security to collect a spousal benefit. In contrast, married spouses must wait until after their higher paid spouse has filed for benefits to claim their own.
However, if you are filing for a spousal benefit before your ex, your divorce must be at least two years old. This rule must have been added to discourage retirees from getting divorced just to speed up a spousal benefit. An ex-spouse becomes “independently entitled” two years after a divorce.
If you file before your Full Retirement Age (FRA), age 66 for people born between 1943 and 1954, you will be given the greater of either your own personal benefit or no more than 50% of your spouse’s benefit.
There are two reasons why you should probably delay taking your benefit after age 62. Benefits earned before FRA are subject to a deferment if you earn over $14,160. These reduced paychecks will be repaid in later years with dollars that have not earned interest and have reduced purchasing power due inflation, the saver’s old enemy.
More importantly, if you wait until age 66, you can claim a spousal benefit and delay claiming your personal benefit until age 70. This quirk in Social Security allows you to claim what I call the “free spousal” benefit, and it’s often overlooked. This tactic will allow your own benefit to grow an additional 32%.
For example, assume your ex-husband is due to receive $1,800 per month as his basic benefit at FRA and your personal benefit is $975 per month. As the ex-spouse, you would only be eligible to receive a spousal benefit of $900 per month (50% of $1,800) at age 66, and so you might quickly assume the spousal benefit is useless. Assuming a life expectancy of 85 years for a woman, this mistake would cost you $52,560 in lifetime benefits.
Instead, you should claim your “free spousal” benefit of $900 per month at age 66 and delay claiming your personal benefit until age 70. The ability to choose a lower spousal benefit is only available to those who wait until after their FRA to receive money from Social Security. By delaying your claim, it will have grown an additional 32%, to $1,287 a month, from age 70 on. By following this strategy versus starting at 62, you will reach the break-even point at age 73.
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Regarding divorced spouse benefits, my recent research came up with exactly what you have written. Also, you are right, that these facts are mostly unknown by divorced spouses. I had to ask a lot of questions to figure this out. The best information is on some of the websites about financial information for women. All the shows and talks on social security never address this. The talk is all about spouses, but with half of the people being divorced, it affects a lot of people. Men could benefit from this as well if they were married to a high earning spouse. Divorce lawyers don’t bring this up either. I’m sure many women get divorced after being married close to 10 years and never know this information. If they knew, they might wait until 10 years of marriage to be divorced because it makes a big difference in s.s. received, as you pointed out.
In addition, it doesn’t matter if the former spouse is remarried or not, divorced again, remarried, etc. If the marriage lasted 10 years and happened over 2 years ago, etc. as you wrote, she is entitled as you have written.
There is more to be known that you didn’t mention. In addition, if she remarries after age 60 she may pick between the s.s. benefits of her present spouse and her former spouse. I’m not sure if the 2nd marriage has to last a certain amount of time to be entitled to the second spouses’s benefits. I think it is one year.
Furthermore, if her former spouse dies, even if he is remarrried or remarried and divorced, whatever,
I believe she is entitled to the full amount of his social security payment after his death. If this is true, his full payment would be more than her payment and she should apply for this.
Moreover, if she doesn’t know his social security number, the s.s. office will check her information by his birthdate.
The weird thing about this is that a man or woman could be married several times and each spouse that qualifies is eligible for these benefits. One does not affact the other. In other words, three former wives could receive s.s. benefits from the same man, even if he is presently married, if the ten years and two years requirement apply. I think the thinking is that probably the spouse, usually the wife, lost some income due to childrearing, taking care of the home, etc. if the marriage lasted ten years. Generally, this is true–so it is a big help to those women who didn’t work outside the home while doing the work of raising children or worked at lower paying jobs because of their family responsibilities.
@ Linda, Thank you for your kind words. You have clearly spent many hours researching these important benefits and it is generous of you to share the lessons that your hard work has taught you.
Richard Steven Gregg
Wow, I thought divorces were final and you couldn’t “pick anyone’s bones’ later. Seems like only your own incomes should count after a divorce. No wonder SS is going broke ! It makes people schedule things just right time-wise, just so they can collect. Turns it all into just a money game. Like the old song goes: “Love & Marriage goes together like a horse and carriage, you can’t have one, you can’t have none, you can’t one without the other !!” I guess woman’s liberation just goes so far, when it comes to money…they still love ex-hubby’s deep pckets !!
Is there any way that I can find out if, when, and how much my ex-wife is collecting in Social Security spousal benefits as me ex?
Sorry Al, I think you’ll have to call Social Security to answer this one. If you get a clear answer, it would be helpful if you would share that here. You can call toll-free 1-800-772-1213. They now have an efficient service where you can leave your phone number and have them call you back when an agent is free.