5 Social Security Tips Divorcees Should Know
By Jeremy Reif, CRPS®, Financial Advisor and Owner of Point Wealth Management
As wonderful as marriage can be, there’s no denying the fact that around 50% of marriages in the United States end in divorce.[1] Your life may change drastically after a divorce, but one thing many people don’t realize is that divorce can also affect your Social Security and retirement outlook. In general, the longer you were married holds more weight in the government’s eyes, with ten years being the magic number. So if you were married more than ten years before your divorce, here are five Social Security facts that you should keep in mind in order to make the best decisions for your retirement finances.
1. You Are Still Eligible For A Spousal Benefit
To qualify, your marriage must have lasted at least ten years, you must have been divorced at least two years, and the dependent spouse cannot have remarried. If you want to explore the option of taking a spousal benefit instead of your own, you must be at least 62 and your benefit must not be higher than your ex-spouse’s.
2. Some Documents Are Not Binding
Many times, in the heat of the moment, divorcees sign documents just to close the door and move on from an unpleasant situation. Some attorneys will draft a clause stating that the divorcee in question surrenders their rights to their ex-spouse’s Social Security benefits. However, if you meet the qualifications listed number 1, this divorce decree is not enforceable. If you signed away your rights and now regret it, you can still access your ex-spouse’s benefits.
3. Your Claiming Strategy Doesn’t Affect Your Ex-Spouse
Many people don’t realize that their ex-spouse’s claiming strategy has no bearing on their benefits. Payments made to a divorced spouse on their ex-spouse’s record do not reduce payments for the ex-spouse or their new spouse if they have remarried. Please note, that this is entirely different than if the divorce decree states that part of one’s Social Security benefits must be paid to the ex-spouse.
4. Widow Benefits Are Worth Looking Into
Most divorced spouses can collect their own Social Security while their ex-spouse is alive, but can then apply for a higher widow benefit when the ex-spouse dies. That does not necessarily mean that the deceased ex-spouse’s benefit will be higher than your own, but it’s an option to explore if you find yourself in this situation.
5. Payment Rules Don’t Change
A good rule of thumb to remember is that the same payment rules apply to divorced spouses and widows as to current spouses and widows, as long as you meet requirement number 1.
Create Your Social Security Claiming Strategy
Planning for retirement can be complicated. Adding a divorce or death to the situation can only make things more complicated. At Point Wealth Management, we can help you calculate your potential benefits and determine strategies to make sure you receive the benefits to which you are entitled. If you’re ready to take this step, schedule a call and meet me virtually.
Point Wealth, LLC is not affiliated with or endorsed by the Social Security Administration or any government agency.
[1] https://www.mckinleyirvin.com/Family-Law-Blog/2012/October/32-Shocking-Divorce-Statistics.aspx