Social Security Benefits Strategies for Divorcing Spouses


Social security divorced spousal benefits strategy.  Can a divorced woman collect her ex-husband’s social security?

Divorcing spouses and family law attorneys should anticipate and plan for the impact divorce has on Social Security benefits. To this day, these benefits are a key source of retirement income for most people. The divorce event serves as strong motivation for reviewing retirement, survivor, and disability availability and preparing a benefits strategy. More retirement options are available to married couples, but single and divorced individuals have choices, too. Learn what those options are to get the most from Social Security.

Social security divorced spousal benefits strategy. Can a divorced woman collect her ex-husband’s social security?

Social Security benefits are a key component of retirement. Have a benefit strategy at the outset of your divorce.

Benefits are often substantial. Negotiating alimony and property division from a position of strength requires a benefits strategy. Be mindful, Social Security is a non-negotiable federal program. Spouses may include settlement terms in their Marital Dissolution Agreement (MDA) to optimize on those benefits. But there is nothing spouses may agree to, attorneys should draft, or a judge can order that alters an individual’s right to benefits. With Social Security, either you have the rights or you don’t.

Before getting started, understand that this discussion is intended to be a general overview only. Exceptions could apply to you. In some respects, Social Security can be complicated than tax law. If you have questions or concerns about your specific Social Security benefits, then confer with an experienced Social Security benefits lawyer. Do not guess!

Social Security Benefits for Divorced Spouse and Current Spouse

Whether divorced or a current spouse, Social Security benefits are a key component of retirement. What is the benefit at full retirement age (FRA)? Will the earnings cap result in forfeited benefits? How much will annual cost-of-living adjustments (COLA) help? As a marital strategy, spouses coordinate their benefit claims. As a divorce strategy, an economically dependent spouse should seek support and property resources that complement benefits for a comfortable post-divorce lifestyle. The supporting spouse is better off with a strategy that builds on the supported spouse’s optimized benefit. Counsel representing the supporting spouse assists the client in negotiating favorable divorce terms that:

1) Recognize both spouses’ need to optimize benefits; and

2) Ease the financial burden of support obligations and marital asset and debt division.

Spouses negotiate and mediate alimony, equitable distribution of marital property, and parenting plan issues. The divorce attorney is in a position to guide the client toward a settlement that takes full advantage of Social Security benefits. Obtain a schedule of benefits first, then negotiate the financial aspects of divorce for the MDA.

Social Security Planning Strategies for Aging Spouses

We have been warned for two decades about the phenomenal number of Baby Boomers heading into retirement. Boomers are now retiring at a rate of about 10,000 per day and many are divorced (or will be). Social Security benefits make up half or more of most people’s retirement income at age 65 and older. Prudent Gen-X’ers, Millennials, and same sex married couples should also plan on optimizing benefits.

Various divorce strategies build upon Social Security retirement, survivor, disability, and children’s benefits. For general retirement planning, get information directly from the Social Security Administration (SSA) website. Utilize the Online Retirement Estimator. Certain rules and exceptions apply to public employees. For help with your specific circumstances, refer all technical retirement benefits questions to your personal financial advisor, especially if related to income taxes. Important exceptions may apply to your particular situation.

Claiming Social Security Spousal Benefits: Benefits Based Upon Other Spouse’s Work Record

Your benefit strategy should strive for the maximum allowable benefit after divorce, when it’s finally time to retire. Full retirement age depends upon birth year, but will not be later than age 67. (Note that a worker may delay retirement to age 70 which is the maximum for delayed credits). Optimizing personal benefits takes nothing away from a former spouse’s benefit or, if remarried, from his or her current spouse. (Did the other spouse intentionally evade FICA tax during the marriage by earning cash on the side, thereby reducing the benefit amount? Talk to an attorney about concealed income and hidden assets.)

To develop a fact-based strategy, each divorcing spouse should obtain his or her own Social Security Statement from SSA.gov. The official report is the only way to know with certainty what benefits will be paid on one’s own work record.

Not a first divorce for you or the other spouse? The same rules apply. Benefits are collected on one’s own work record and on the work record of one former spouse. There is no stacking marriages or combining work records to increase benefit amounts – that’s a myth and not permitted.

What Percentage of Social Security Benefits for Divorced Spouses?

Assuming you qualify, to determine how much your benefit will be as a divorced spouse, the SSA compares your work record with the other spouse’s work record (divide in half as though still married). You receive the larger amount. The maximum spousal benefit is 50% of your former spouse’s retirement benefit at his or her FRA. This is critical for the stay-at-home parent. Or for the spouse who managed the family business, but never drew a salary.

Statistically in divorce, women suffer economically more than do men. Take a look at what Jeff Landers, long-time Forbes contributor, has to say about the financial negatives divorce can have on women and how to turn those around. Divorcing spouses of both sexes need to make decisions based upon knowledge, not guesswork. As part of the divorce process, consult with financial advisors and planners about retirement planning. Need a referral? Ask your family law attorney for a recommendation. Experienced lawyers are ready for this, it’s that important, and usually have a local referral list ready for the asking.

How Much Social Security Does an Ex Spouse Get?

Qualifying for Social Security benefits generally requires accumulating 40 credits in lifetime earnings – the work record. If you do not qualify on your own work record or it’s insufficient, then you may qualify on your spouse’s. A few rules determine your right to collect on your former spouse’s benefit:

  • You must have been married at least 10 years to that former spouse. Is the marriage hovering at 9.5 years? Hold off on filing for divorce. Divorce proceedings already pending? Delay. The divorce decree must be entered after 10 years of marriage, not a day sooner;
  • You must be at least 62 years old, the earliest retirement age;
  • You must be unmarried. Benefits accrued under the prior marriage are revoked by your remarriage, but are unaffected by the former spouse’s remarriage. (Did your new marriage end in death, divorce, or annulment? Your right to an earlier former’s spouse’s benefit revives.);
  • Your own work record must provide less benefit than what you would collect based upon your former spouse’s work record; and
  • Your former spouse must qualify for Social Security before collecting on his or her benefit.

Former spouse not collecting benefits yet? If both of you are at least 62 and have been divorced at least two years, then you can start collecting on your former spouse’s benefit.

How much an ex-spouse gets depends upon his or her FRA which, in turn, depends upon year of birth. This table shows the decrease in benefit amount for claiming early retirement at age 62. See Table A.

Table A

This table shows the decrease in benefit amount for claiming early retirement at age 62.

Decrease in Benefits for Claiming Early

Assumes a $1,000 primary insurance amount (PIA) at full retirement age

Birth Year FRA Benefit amount at 62 Percent reduction at 62
1943-1954 66 $750 25.00%
1955 66 and 2 months $741 25.83%
1956 66 and 4 months $733 26.67%
1957 66 and 6 months $725 27.50%
1958 66 and 8 months $716 28.33%
1959 66 and 10  months $708 29.17%
1960 and later 67 $700 30.00%
*Source: SSA

Earliest Retirement Age?

You decide when to retire, not the SSA. However, age 62 is the earliest anyone can collect retirement benefits. By claiming early retirement benefits (anytime before FRA), the amount is forever reduced. Collect early, collect less for life.

Life expectancy matters. How is your health? Does longevity run in your family? What kind of work can you do? Will the MDA provide sufficient resources to spend down if retirement is postponed to age 70? At 70, the retirement benefit maxes out on one’s own record. A tailored alimony schedule and well-crafted property settlement could make postponing retirement feasible.

For instance, the 65-year-old may implement a divorce strategy wherein alimony is the primary source of support until age 70. Perhaps larger alimony in futuro payments the first five years with a substantial reduction in alimony (or termination) coincident with collecting benefits at age 70. Be aware, too, that about 40% of claimants must pay income taxes on their benefits. Consult a financial advisor and crunch the numbers.

Later Retirement?

Collect later, collect more for life. By waiting until age 70 to claim the benefit on your own work record – that is the age Social Security maxes out – Boomers born before 1960 enjoy maximum delayed retirement credits of 32%. (Waiting until age 70 will not increase the spousal benefit, however.) Those whose FRA is 66 enjoy an 8% per year delayed retirement credit, a significant plus. For those whose FRA is 67, maximum delayed retirement credits at age 70 drop to 24%. In either case, develop a strategy that allows you to collect the most simply by delaying retirement to age 70.

Importantly, the maximum spousal benefit is 50% of the other spouse’s primary insurance amount (PIA) benefit at FRA. But does not include delayed retirement credit amounts! (That’s not true for survivor benefits, discussed below.) The following table shows the percentage spousal benefits get reduced if claimed early, before reaching FRA. See Table B.

Table B

This table shows the percentage spousal benefits get reduced if claimed early, before reaching FRA.

How spousal benefits are reduced if claimed before full retirement age (FRA)

Age of claim % when FRA is 66 Dollar amount of spousal benefit with $1,000 PIA % when FRA is 67 Dollar amount of spousal benefit with $1,000 PIA
62 35% $350 32.5% $325
63 37.5% $375 35% $350
64 41.7% $417 37.5% $375
65 45.8% $458 41.7% $417
66 50% $500 45.8% $458
67 50% $500
 *Source: SSA

Earnings After Retirement?

An individual can claim Social Security benefits and continue working, for a price. Earning wages? At FRA there is no reduction in benefit amount – the earnings cap gets lifted. Early retirement triggers the earnings cap. Countable earnings are wages and salaries or self-employed net earnings. Relax, there is no limit on income from investments, pensions, rents, government benefits, and the like.

How does the earnings cap apply? If you retire early at age 62 and have employment income, then your benefit amount will be reduced by wages above the earnings limit. In 2018, for instance, $1 was forfeited in benefits for every $2 earned above the $17,040 earnings limit. (Visit SSA.gov for current-year earnings limits.) The SSA withholds monthly benefit payments until the earnings cap is satisfied. Months could pass with no benefit payment at all. Furthermore, excess benefits received from SSA must be repaid. A professional whose salary is well above the earnings cap may find early retirement a bad strategy. There are exceptions.

In the months just preceding full retirement age, the SSA allows greater wages without forfeit. For instance, the 2018 earnings cap in the months before FRA was $45,360 with benefits reduced $1 for every $3 earned above the limit. Know what the earnings cap will be before nearing retirement.

What happens to early retirement benefits not paid because wages exceeded the earnings cap? At FRA the SSA recalculates the benefit, giving credit for those months no benefit was paid due to the earnings limit. This illustrates the importance of having a trusted financial advisor. Determine the benefit amount with various earnings and retirement dates. Calculate benefits, then negotiate a settlement agreement.

What Divorce Lawyers Need to Know About Social Security Benefits and Strategies for Divorcing Clients

Some older individuals have options not available to their younger counterparts. Divorce attorneys must identify the rare client who qualifies for one of two Social Security claiming strategies (receiving more later by collecting less initially). These benefit strategies were closed to most retirees by the Bipartisan Budget Act of 2015. Take a closer look.

File and Suspend Option

The “file and suspend” option allowed a qualifying individual to file for benefits at FRA and then immediately suspend benefits to keep working. Why did this make economic sense?

  • Upon claiming, the dependent spouse and minor child became eligible for auxiliary benefits;
  • The qualifying spouse could continue working to age 70, accruing 8% per year in delayed-retirement credits; and
  • A lump sum payment for suspended benefits was an available option.

The strategy for a married couple was a coordinated effort to receive “less now, more later.”

Grandfathered Beneficiaries: Only those who claimed benefits at FRA before the April 29, 2016, deadline by selecting the “file and suspend” option were grandfathered in.

Between married spouses, under prior law only one could “file and suspend” and one could file a “restricted claim for spousal benefits” (discussed next). If divorced and both 62 years old or older on January 1, 2016, then at FRA each could file a “restricted claim for spousal benefits” on the other’s work record. This allowed one’s own benefit to continue growing until age 70.

Not grandfathered in? A limited “file and suspend” claim at FRA is still available to qualifying individuals. Under current law, delayed retirement credits can accrue until age 70, but during suspension no benefits can be collected by anyone.

Restricted Claim for Spousal Benefits Option

The “restricted claim for spousal benefits” option is another benefit optimization strategy for a dwindling number of divorcing spouses. By restricting a claim to spousal benefits, the individual claims the former spouse’s benefit at FRA, but continues working and increasing his or her own benefit until it tops out at age 70. The best of both worlds!

Option Eligibility: Who is eligible? This option is only available to those born on or before January 1, 1954. When born after that date, married or divorced, the individual is deemed to file for both spousal and retirement benefits. The SSA compares records and pays the higher amount. The result is different with survivor benefits.

Ex spouse social security benefits after death:

Can I collect social security from my ex husband when he died?

Can a divorced woman collect her ex husband’s social security?

Another consideration for divorcing spouses is the Social Security survivor benefit for widows, widowers, and divorced former spouses. Survivor benefits are still available to those born on and after January 1, 1954. A surviving divorced spouse chooses which benefit to collect first – his or her own benefit or the survivor benefit on the deceased former spouse. By collecting the survivor benefit first, one’s own retirement may be postponed to accumulate delayed retirement credits until age 70. Alternatively, the divorced spouse could start with his or her own benefit and switch to the survivor benefit at FRA.

To collect the survivor benefit on a former spouse:

  • You must be at least 60 years old (50 if disabled); and
  • You must have been married to each other for 10 years.

This table shows the percentage the survivor receives on the deceased former spouse’s benefit. See Table C.

Table C

This table shows the percentage a survivor receives on the deceased former spouse’s benefit.

Start age % of decedent’s Benefit
60 71.5%
61 76.3%
62 81.0%
63 85.8%
64 90.5%
65 95.3%
66 100.0%
*Source: M.B. Franklin, CFP

Did the decedent postpone benefits until age 70? The survivor collects 100% of the former spouse’s benefit with delayed retirement credits included!

Did you remarry after your former spouse died? Timing matters. If remarried before turning 60 (50 if disabled), then the survivor benefit is unavailable. As a strategy, maybe wait to remarry.

Do not forget that if raising the deceased parent’s child, then the child may also receive benefits on the decedent’s work record. The child must be under the age of 18, or age 19 if still a full-time high school student. The primary residential parent (PRP) could receive a benefit if their child is still under age 16. An older disabled child may also receive benefits on the deceased parent’s work record.

What if a spouse dies during divorce proceedings? The marriage terminates with divorce proceedings dismissed. With regard to benefit collection, the marriage must have lasted nine months for a widow or widower to collect the survivor benefit and married one year to collect the spousal benefit.

Have a Social Security benefit strategy at the outset of divorce. In planning your retirement, know what you will need to receive or pay in alimony and what division of marital assets and debts will allow you to live comfortably when added to retirement, disability, or survivor benefits. Laws and rules change. Consult a financial advisor and hire an experienced divorce attorney to assist with optimizing your right to benefits. The longer the marriage and closer to retirement the spouses are, the more pressing this concern. Divorce cannot add to or subtract from either spouse’s benefit, but a tailored MDA can build nicely on a benefit foundation.

The author wishes to specifically thank:

Mary Beth Franklin, CFP
Contributing Editor
Investment News
@MBFretirepro

Questions about Social Security benefits? Find the answers in Mary Beth Franklin’s e-book at www.investmentnews.com/MBFebook, $29.95.

Warning: Always check current social security law applicable to you.  When in doubt, seek advice from an experienced lawyer with social security benefits or a financial advisor you trust.

References, Resources, and More:

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