How Does Divorce Impact Your Social Security Benefits?

How Does Divorce Impact Your Social Security Benefits?

June 30, 2023

The effects of divorce can ripple through every area of your life, bringing changes that are both difficult and far-reaching.

One area that often gets overlooked amidst the turmoil is the impact on your Social Security benefits and your future financial security. Understanding how divorce affects your retirement income is vital for making informed decisions and ensuring your financial security.

When a marriage ends, not only are the emotional ties severed, but the financial foundation you've built can also be disrupted. Social Security benefits are a significant component in many individuals' retirement plans, and one's eligibility to receive these benefits is contingent on several factors. Failing to consider the implications of divorce on your Social Security benefits may lead to missed opportunities or unintended financial setbacks that could affect your quality of life during retirement.

By unraveling the nuances of how divorce affects your Social Security benefits, you'll be better equipped to safeguard your financial future and make informed decisions during this challenging time. Let's dive into the details and shed light on the crucial connection between divorce and your Social Security benefits.

What portion of a spouse's Social Security benefits does one typically receive?

Understanding a spouse's Social Security benefits is a crucial consideration for those planning for retirement. The Social Security Administration has established specific rules governing spousal benefits, aiming to provide financial support to dependent or former spouses.

In general, an individual can be eligible for up to 50% of their spouse's Social Security benefits, provided certain criteria are met. There is a distinction between spousal benefits and divorced spousal benefits. To qualify for spousal benefits, the marriage must have lasted at least ten years, and the age of the spouse seeking benefits must be a minimum of 62 years old. Additionally, the spouse must be eligible for Social Security retirement or disability benefits.

For divorced spousal benefits, similar criteria apply. The marriage should have lasted at least ten years, the age of the divorced spouse seeking benefits must be a minimum of 62 years old, and the divorced spouse must not have remarried. However, with divorced spousal benefits, the ex-spouse is eligible to file for Social Security or disability benefits even if the primary earner hasn't yet filed for their benefits. This is the case only if the marriage must have ended more than two years ago and if the individual claiming the benefits must not have remarried.

It’s worth noting that the amount received by the individual does not diminish the other spouse's benefits. Instead, it is an additional payment made by the Social Security Administration to the eligible spouse. This means that the spouse's benefits remain intact, unaffected by the benefits disbursed.

Nonetheless, the precise percentage received by the individual can vary based on factors such as their own work history, the age at which they claim benefits, and the current full retirement age determined by the Social Security Administration. Seeking guidance from a trusted financial professional or the Social Security Administration can provide valuable insights into the specific calculations and options available, tailored to one's unique circumstances.

Is it possible for me to collect my former spouse's Social Security benefits?

The question of whether it is possible to collect a former spouse's Social Security benefits is a common concern for individuals who have gone through a divorce. The good news is that, in certain circumstances, it is indeed possible to receive benefits based on your former spouse's earnings record.

To be eligible for ex-spouse benefits, you must meet certain criteria. First, your marriage to your former spouse must have lasted for at least ten years. Additionally, you must be currently unmarried, although there are exceptions if you have remarried but your subsequent marriage ended through death, divorce, or annulment. You must also be at least 62 years old, which is the earliest age at which you can generally claim Social Security benefits.

The maximum Social Security benefit amount is subject to annual adjustments. As of 2023, the maximum monthly benefit amount for an individual retiring at full retirement age (currently around 66 to 67 years, depending on the birth year) is $3,627. Although this amount may change in subsequent years due to cost-of-living adjustments and other factors.

It's important to note that your former spouse must be eligible for Social Security retirement or disability benefits in order for you to be eligible for ex-spouse benefits. If they haven't yet applied for benefits but are eligible, you can still claim benefits based on their record as long as you have been divorced for at least two years.

Can I collect spousal benefits and my own Social Security benefits?

If you're eligible for both spousal or ex-spousal benefits and your own Social Security benefits, you may wonder if it's possible to receive both simultaneously. If your spousal benefits outweigh your own retirement benefits,you may be eligible for a combination of both benefits that equals the higher amount. There may be additional factors that could impact your situation, and speaking to a trusted financial expert is advisable for the most relevant information.

In general, spousal benefits allow you to receive up to 50% of your spouse's benefit amount. It's noteworthy to state that benefits paid to a spouse or any family member will not decrease the primary earner's benefits. These benefits are separate from your own individual Social Security retirement or disability benefits.

However, the Social Security Administration follows a rule called the "deemed filing" provision. This provision states that if you file for either spousal benefits or your own retirement benefits, you will be "deemed" to have filed for all benefits for which you're eligible. In practical terms, this means that if you're eligible for both types of benefits, you will be given the higher of the two benefit amounts. You won't receive both amounts combined.

If you choose to claim spousal benefits before reaching your full retirement age, your benefit amount may be reduced. Additionally, claiming spousal benefits does not delay the growth of your own individual benefit amount. This means that if you delay claiming your own Social Security benefits past your full retirement age, your benefit may continue to increase until you reach age 70.

It's crucial to consider your personal circumstances and consult with the Social Security Administration or a trusted financial professional to determine the best strategy for optimizing your benefits.

How to apply for your ex-spouse's Social Security benefits

To apply for your ex-spouse's Social Security benefits, you need to follow these steps:

  1. Verify eligibility: To be eligible, you must have been married to your ex-spouse for at least 10 years, be currently unmarried (unless you remarried after the age of 60), and be at least 62 years old. Additionally, your former spouse must be entitled to Social Security retirement or disability benefits.

  2. Gather required information: Collect the necessary documentation to support your application. You will typically need your birth certificate, marriage certificate, divorce decree, and any relevant tax records or employment history.

  3. Contact the Social Security Administration (SSA): Reach out to your local SSA office or visit their website to start the application process. You can apply in person, over the phone, or online, depending on your preference and convenience.

  4. Complete the application: Provide accurate and detailed information on the application form, including your personal details, information about your former spouse, and any additional required documentation. Ensure that you provide all necessary information to avoid delays or complications in the processing of your application.

  5. Submit the application: Once you have completed the application, submit it to the SSA according to the instructions provided. If you are applying online, you can submit your application electronically. If you are applying in person or over the phone, follow the instructions given by the SSA representative.

  6. Await a decision: The SSA will review your application and determine your eligibility for benefits based on your former spouse's earnings record. They will inform you of their decision in writing, usually by mail. If approved, the letter will outline the amount of benefits you will receive and when they commence.

Each individual's situation varies, and additional factors may come into play. You can guidance from the Social Security Administration and a Certified Divorce Financial Analyst (CDFA®) to receive personalized assistance and gain a comprehensive understanding of the process specific to your circumstances.

What happens to the Social Security benefits of a former spouse after their death?

There are several factors that determine the percentage of benefits a former spouse receives after the death of their ex-spouse, including the duration of the marriage and the eligibility of the surviving divorced spouse.

In general, if a former spouse passes away, their Social Security benefits cease to exist. Nevertheless, there are certain circumstances in which a surviving divorced spouse may be eligible for survivor benefits. To qualify for survivor benefits, the marriage must have lasted for at least ten years, and the surviving divorced spouse must be unmarried unless they remarried after the age of 60 (or 50 if disabled).

The amount of survivor benefits that can be received by the surviving divorced spouse is generally based on the deceased former spouse's earnings record.

To determine eligibility for survivor benefits after the death of a former spouse, it is advisable to contact the Social Security Administration directly. They can provide specific information based on your circumstances and guide you through the application process.

Surviving spouses or minor unmarried children may be eligible for a one-time payment of $255. However, in order to qualify for this payment, certain requirements must be met, and the application must be submitted within the first two years following the primary earner’s death.

Can my former spouse reduce my Social Security benefits?

Social Security benefits are calculated based on your individual earnings history and the specific rules outlined by the Social Security Administration. The benefits you receive are determined by your own work record, including factors such as your earnings and the number of years you have paid into the Social Security system.

The amount of benefits you are entitled to cannot be decreased by your former spouse's benefit amount. Yet, there are certain scenarios where your benefits may be affected indirectly. For example, if you are eligible to receive benefits based on your former spouse's earnings record, the amount you receive may be influenced by factors such as your former spouse's earnings history, your age, and the timing of when you decide to claim benefits.

If you qualify for benefits based on your former spouse's earnings record, it does not impact the amount of benefits they receive. Their own benefits are separate and do not decrease as a result of you claiming your entitlement.

Work with a Certified Divorce Financial Analyst®

Safeguarding your Social Security benefits during a divorce is as crucial as protecting any other financial asset. Understanding your options and seeking professional guidance are essential steps to minimize the risk of being left without necessary coverage.

When it comes to complex financial matters like Social Security and divorce, it's wise to enlist the expertise of a Certified Divorce Financial Analyst® (CDFA®). A CDFA® can assist you in navigating the financial complexities of divorce, ensuring the security of your financial future, and maximizing the benefits you are entitled to receive.

Have any questions? Unsure about your next steps? Book a consultation today.