Divorce and Social Security
Social Security, for most Americans, is likely the most valuable retirement asset they have.
And with tens of millions of baby boomers either in or heading towards lives of retirement, interest in the Social Security system and its benefits are extremely high.
Unfortunately, there's also widespread confusion about the rules, and in this column, we'll address what may be one of the biggest "unknowns" many people have about Social Security; that being the possible option that divorced folks may have to draw benefits based upon an ex-spouse's social security record.
Two stories, both involving older women who were divorced and struggling financially, serve as unfortunate examples of what can result from lack of information. In both examples, the ex-husband was the primary earner and had re-married.
Our first story is about Joan, who used to be married to a doctor. Joan was a stay-at-home mom. One day, after more than 25 years of marriage, her doctor husband announced he wanted to divorce Joan. She was devastated. Her ex had a really good attorney, and in the divorce settlement she ended up with quite a bit less than one might expect.
Joan tried to find a job, but had no resume' and obsolete work skills. She found herself unexpectedly alone, in her mid-60s, and struggling to make ends meet.
One day, Joan happened upon an article, much like this one, and as she read it, she realized what she was learning from it would completely change her life and her future.
You see, until that fateful article was published, Joan was clueless that she was entitled to Social Security benefits based upon her ex-husband's work record. After visiting her local Social Security office, she now could count on a monthly source of inflation-adjusted income for the remainder of her days.
So much pressure was taken off of Joan with that revelation.
Then there is the case of Sue; a case that quite a bit more unfortunate that Joan's. Sue, you see, was well into her late 80s when someone informed her that she could have been receiving a spousal benefits based on her former husbands work record for decades.
Sue had spent more than 20 years just barely getting by, taking drastic measures, including skipping meals, to save money and eek out a meager existence. A sad state of affairs indeed.
It's important to know, then, that some divorced spouses qualify for Social Security benefits based on their former spouse's record. The monthly benefit can be as much as 50% of what the ex-spouse is entitled to receive when he or she is full retirement age (FRA). FRA is currently age 66.
Here are some of the things to know:
The maximum benefit you can get is half the amount your ex is entitled to at FRA. (This is referred to as their Primary Insurance Amount, or PIA.) However, if your age is under FRA when you apply for benefits, your benefit will be reduced.
For instance, if your full retirement age is 66 and you apply for a divorced spouse benefit at the earliest age possible (62), the amount you receive will be about 35%, not 50%, of what your ex would receive at FRA.
Another thing to know is that the age that your former spouse files to start Social Security benefits does not affect the amount you are eligible to receive.
There are also certain criteria you have to meet to receive benefits. You will be entitled to a divorced spouse benefit if:
- You were married at least 10 years;
- You are unmarried at the time you apply;
- You are not entitled to receive a higher benefit based upon your own work history;
- Your ex is already receiving Social Security;
- If your ex has not yet filed for Social Security, then you must be divorced for at least two years.
By the way, if you re-marry, you will generally lose your divorced spouse benefits until your new marriage ends (due to death, divorce, or annulment).
There is no deadline for filing spousal benefits. However, you have to prove the marriage with a copy of the marriage certificate and divorce decree.
Also, the ex on whose record benefits are claimed will not be informed that a former spouse is getting benefits, since, after all, it has no affect on the amount to which the ex is entitled.
No one should be forced to spend their later years in poverty due to divorce. Hopefully, as happened with Joan in the story told earlier, this article will change someone's life!
For more information about divorced spouse benefits, visit the www.SSA.gov and type "divorced spouse" in the search box.
