Divorce carries with it a number of financial considerations: will you stay in the marital home, let your spouse take it, or sell it? Will there be spousal support? How will you divide up your retirement accounts? But one thing many people fail to think about is Social Security benefits, possibly because during the divorce process, you do not need to take any action regarding those benefits if neither spouse is currently receiving them. That doesn’t mean they are not an important consideration, though. Understanding what you qualify in terms of Social Security can affect your long-term planning, and whether a proposed divorce settlement is reasonable for you or not. Let’s take a look at how divorce affects your Social Security benefits.
Social Security Benefits and Divorce
You might be surprised to learn that you can receive Social Security benefits based on your ex-spouse’s employment record, even if you are divorced. In order to do so, there are a few requirements:
- Your marriage lasted 10 years or more;
- You are not currently married;
- You are age 62 or older;
- Your ex-spouse is entitled to receive Social Security retirement or disability benefits; and
- The Social Security benefit to which you would be entitled based on your own work record is less than that to which you would be entitled under your ex-spouse’s record.
As a divorced spouse, the benefit to which you are entitled based on your ex-spouse’s record is one-half of their full retirement amount, or, if applicable, the disability benefit they are entitled to. This assumes that you begin receiving benefits at your full retirement age. Your full retirement age depends on the year in which you were born. For people born in 1960 or later, the full retirement age is 67. For those born between 1943 and 1959, the full retirement age is between 66 and 67 depending on the year. If your spouse is entitled to any delayed retirement credits for delaying retirement past full retirement age, these will not be a part of your benefit.
How Remarriage Affects Your Social Security Benefit
If you are otherwise eligible for Social Security benefits based on your ex-spouse’s record, but you remarry, you are no longer eligible for benefits from your ex-spouse during your subsequent marriage. However, if that subsequent marriage ends, whether by divorce, death, or annulment, you may again be eligible for Social Security benefits based on the previous spouse’s record
If You and Your Ex Are Both Entitled to Social Security
What if you would be eligible for Social Security retirement benefits on your own record, but also your ex-spouse’s? Here how it works: Social Security will pay your retirement benefit first. If the benefit for which you would be eligible based on your divorced spouse’s record is greater, you will receive an additional payment so that your benefit, combined with the supplemental payment, equals the higher benefit amount.
For individuals born before January 2, 1954 who have reached full retirement age already, you have an interesting option. You can choose to receive only the benefit you are entitled to under your ex-spouse, and defer receiving your own benefit until a later time. However, this option is not available to those born on or after January 2, 1954. For people born January 2, 1954 or thereafter, filing for one benefit means filing for all.
How Other Work or Pensions Affects Your Benefit
If you are receiving benefits and you continue to work, there is a retirement benefit earnings limit of which you should be aware. If you are under your full retirement age during the whole year, Social Security deducts one dollar from your benefit payments for every two dollars you earn above the annual limit ($17,640 in 2019). During the year in which you reach your full retirement age, things are a little different. One dollar is deducted for every three dollars you earn above another limit ($46,920); however, the Social Security Administration only counts earnings from before the month you reached your full retirement age. So if you reach your full retirement age in March, only earnings from January and February would be counted. Starting with the month in which you reach full retirement age, your benefit is not reduced no matter how much you earn.
How Your Benefit Affects Your Ex-Spouse’s (and Vice Versa)
You might be wondering if, by taking a benefit based on your ex-spouse’s record, you are diminishing the benefit they will receive. The answer is no: they will continue to receive the same benefit to which they are entitled regardless of your choices.
What if your spouse qualifies for Social Security retirement benefits, but has not applied for them? Does that mean that you must wait to apply if you are otherwise qualified? The good news for you is that as long as you have been divorced for two years, you may apply for Social Security benefits on your ex-spouse’s record, even if they have not applied.
If you have more questions about how divorce affects your Social Security benefits, questions about divorce after 50, or divorce in general, we invite you to contact our law office to schedule a consultation.