How Divorced-Spouse Benefits Can Support Your Retirement
Over the last 20 years, the divorce rate among people age 50 and older has doubled.1 Getting divorced later in life presents unique financial challenges, one of which is determining eligibility for Social Security benefits. The following rules apply to the division of Social Security following a divorce.
Eligibility
You may be eligible to collect Social Security spousal benefits on your spouse’s earnings if your spouse is entitled to collect Social Security retirement or disability benefits and you:
- Were married to your spouse for at least 10 years
- Have reached age 62
- Have not remarried; if you remarry while your ex-spouse is still alive, you will lose eligibility for divorced-spouse benefits based on your ex’s record
You can receive divorced-spouse benefits on your ex’s record if you have been divorced for at least two years and your ex-spouse is eligible for benefits (even if he or she has not yet applied for those benefits).
Benefit amount
If you wait until full retirement age to apply for divorced-spouse Social Security benefits, you will be eligible to receive up to half of your ex-spouse’s full retirement or disability benefit. If you begin taking benefits between age 62 and full retirement age, the amount you receive will be reduced to as low as 32.5% of your ex’s full benefit amount. The earliest you can apply for divorced-spouse benefits is three months prior to your 62nd birthday. Keep in mind that if you are entitled to your own Social Security benefits, your divorced-spouse benefits must be more than you would have received based on your own record. Basically, you can receive the higher amount of the two benefits for which you’re eligible, not both. Any benefits you receive as a divorced spouse do not impact the benefits paid to your ex-spouse or his/her current spouse.
Other considerations:
If you were born before January 2, 1954, you have the option to receive only the divorced-spouse benefit and delay your own retirement benefit until a later date. If you were born on or after January 2, 1954, you do not have the option to take only one benefit; filing for one benefit will trigger filing for all retirement and ex-spousal benefits. Also, if you continue to work while receiving benefits, applicable earnings limits will apply.
At Creative Planning, we understand how challenging all aspects of a divorce can be. That is why we focus on providing you with a clear path forward by helping you to determine your financial need, gain an understanding of your options and make decisions that are in the best interest of you and your family. For help determining your Social Security eligibility following a divorce, or for any other financial matter, schedule a call with a member of our team.
