Social Security is complex and confusing for most people under ordinary circumstances. If we add a wrinkle like divorce into the mix, it can become very confusing. Many divorcees wonder if they can collect a benefit based on the earnings of their ex-spouse. Here's a closer look at the Social Security rules surrounding divorce to help you plan as you move into retirement.
The Basic Rules
If you were married and the marriage lasted for at least ten years, then you might be entitled to a benefit based upon your ex-spouse’s earnings record.
There are several criteria that that must be met, including:
- You are not currently married at the time of application.
- You are at least 62 years old (Age 60 if your ex-spouse is deceased or Age 50 if you're disabled)
- Your ex-spouse is entitled to a Social Security retirement benefit based upon their own earnings record. This does not mean they have to file for their own Social Security benefits. This means they must have worked enough to be eligible for a Social Security retirement benefit AND be at least age 62.
- Your own benefit that is based upon your earnings record is less than the benefit available to you under your ex-spouse’s earnings record.
Two additional things to know:
- If you remarry then you cannot collect a benefit on your ex-spouse’s earnings record unless that marriage ends via divorce, death, or annulment of the marriage.
- If you're eligible for a retirement benefit based upon your own earnings record, Social Security will pay that benefit first. However, if the benefit based on your ex-spouse’s earning record would be higher then you’ll receive an additional amount to bring your total benefit up to that level.
A rule change a couple of years ago limited one option for divorcees. Prior to this change, you could file for one-half of your ex-spouse’s benefit once your reached your full retirement age. Then at age 70 you could choose to file for your own benefit if this would be higher than the spousal benefit. The advantage is that you could draw a benefit starting at your Full Retirement Age and let your own benefit grow another 8% per year until age 70. If you were born prior to January 2, 1954 this option is still available to you. If you were born on or after this date, then any filing would be “deemed” to cover all benefits that you are eligible for, rendering this strategy useless.
* It's important to note that this restriction does not apply to Social Security survivor benefits. If your ex-spouse is deceased, then you can file for a survivor’s benefit based upon their earnings record.
If you and your ex-spouse had children together, you can collect dependent benefits for them if your ex-spouse dies if:
- They are aged 16 or under.
- Beyond that, they may collect benefits until age 18 or 19 if still in high school.
- Older children can receive dependent benefits if they are disabled.
Some Thoughts on Filing Strategies
The rules on collecting a Social Security benefit based upon your ex-spouse’s earnings record are designed so that a vindictive ex-spouse cannot block you from doing this.
If you collect a benefit based upon their earnings record, it will not impact them collecting their own benefit once they decide to do so. Likewise, your ex-spouse is able to collect a benefit based upon your earnings record as well. If your ex-spouse is remarried and their current spouse is collecting a benefit based upon your ex-spouse’s earnings record, this will have no impact upon the benefit you are eligible for.
A few things to keep in mind as you decide whether to collect a benefit based upon your ex-spouse’s earnings record:
- Just as with your own benefits, if you file for benefits under your ex-spouse’s earnings record, your benefits will be reduced if you file prior to your full retirement age. The exception to this is for survivor benefits if he or she is deceased.
- If you collect benefits prior to reaching your Full Retirement Age and you continue to work, if you earn more than the allowable Social Security earnings limit that year, you may owe some benefits back. For 2018 this is $17,040. Once you reach your full retirement age, that earnings limit no longer applies and you can make any amount and collect your benefits.
- Just as with your own Social Security benefits, you are entitled to one lifetime “do-over” should you file for a benefit under your ex-spouse’s earnings record and decide to stop collecting this benefit. You must do this within the first 12 months and any benefits received, including any dependent benefit, will need to be repaid. This could come into play if your situation changes after you file for benefits. For example, if you return to work and are earning enough as to where your benefits will be reduced or eliminated.
When planning your retirement, don’t forget to factor in any Social Security benefits you might be entitled to based upon the earnings record of your ex-spouse. Also remember this is a complicated process. Enlisting the aid of knowledgeable financial advisor makes sense. Contact me for help to determine the best course of action for your situation.
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Desmond Henry is a fee-only CERTIFIED FINANCIAL PLANNER™ professional and founder of Afflora Financial Life Planning in Topeka, Kansas. He helps the retiring/retired plan their finances and invest their money. CLICK HERE to learn more.