Social Security benefit rules are complex and confusing, and even more so when you get a divorce. The majority of my mediation clients are going through a grey divorce. Because I am also a Certified Divorce Financial Analyst, my preparation for mediation includes cash flow projections related to proposed equitable division and sometimes spousal support. Because most of my clients are in their late 50s and beyond, I include the projected benefits they will receive from Social Security. It’s important to educate your clients on what benefits they can claim from Social Security even though it may be years after mediation when they actually apply for benefits. The Social Security Administration will not proactively seek out the best available benefit so it’s up to the applicant to know what is available to them. Some of you readers may be divorced and wonder how these rules apply to you. This is what I would tell you.
Social Security Benefits on Your Ex-Spouse's Work Record
If your marriage lasted 10 years or longer, you can receive benefits on your ex-spouse's record (even if he or she has remarried) if:
You are unmarried and you are age 62 or older;
Your ex-spouse is entitled to Social Security retirement or disability benefits and;
The benefit you are entitled to receive based on your own work is less than the benefit you would receive based on your ex-spouse's work.
If your ex-spouse has not applied for retirement benefits, but can qualify for them (is old enough), you can receive benefits on his or her record if you have been divorced for at least 2 years.
The Social Security benefits you receive based on your ex-spouses work record has no effect on the amount of benefits your ex-spouse or his or her current spouse may receive.
If you are eligible for benefits both on your own record and your ex-spouse's, you will get the larger of your own benefit or the equivalent of half of your ex-spouse’s Full Retirement Age benefit. Full Retirement Age is age 67 for anyone born after 1959. (See https://www.ssa.gov/benefits/retirement/planner/ageincrease.html to find your Full Retirement Age.) The Social Security administration will pay your benefit first and then, if the benefit on your ex-spouse's record is higher, you will get an additional amount (a topper) based on your ex-spouse's record so the combination of the two equals half of your ex-spouse’s benefit.
If you remarry, you will no longer be eligible for benefits based on your ex-spouse’s record.
Social Security Benefits When Your Ex-Spouse Dies
If you are the divorced spouse of a worker who dies, you could get benefits just the same as a widow or widower (Survivor Benefits), provided your marriage lasted 10 years or more.
Benefits paid to you as a surviving divorced spouse won't affect the benefit rates of other survivors getting benefits on the worker's record.
Survivor Benefits can be received independent of individual benefits.
Benefits can be taken as early as age 60.
Survivor Benefits are worth 100% of what the deceased worker (ex-spouse) collected or was entitled to collect at time of death.
You can remain eligible for Survivor Benefits if you remarry as long as you wait until you are age 60 before you walk down the aisle.
Divorced surviving spouses have more flexibility than other Social Security recipients because their own Social Security benefits (those earned on your own work record) and Survivor Benefits represent two different pots of money. A surviving ex-spouse can choose one benefit first and then switch to the other benefit later if it results in a larger amount. Planning how to take your own vs. Survivor Benefits can make a big financial difference in someone’s life!
When it comes to collecting Social Security Benefits as an ex-spouse, the same rules regarding work and age apply. Any benefits taken prior to Full Retirement Age while still working will be subject to earnings cap restrictions, meaning benefits will be reduced. However, when you reach Full Retirement Age, your benefit is recomputed so those benefits are not lost. The earnings cap in 2021 is $18,960. Any benefit taken before Full Retirement Age whether on your own record, as an ex-spouse or as a surviving ex-spouse, will be permanently reduced. Delaying benefits past Full Retirement Age will grow that benefit 8% per year up until age 70. These are called Delayed Retirement Credits. However, Delayed Retirement Credits do not apply to Survivor Benefits because those benefits are frozen at the time of death. There is no advantage to delaying taking Survivor Benefits past your Full Retirement Age.
Finally, I do have clients who are on their second or third marriage (or divorce I should say). If any of those marriages last at least 10 years, you can choose to take benefits on whichever ex-spouse has the bigger benefit. It’s possible for someone to have 2, 3 or more ex-spouses claiming spousal benefits on their work record if each marriage lasted at least 10 years!!!!