How Does Divorce Affect Social Security Benefits?

How Does Divorce Affect S…

Financial issues are a big part of divorce: how you will divide marital assets; whether you will pay or receive spousal maintenance (and how much); how much child support there will be. With all of these immediate financial concerns, Social Security benefits may be the last thing on your mind. Yet marriage, and divorce, have an impact on your future Social Security benefits that you should not ignore. 

Can I Receive Social Security Benefits Based on an Ex-Spouse’s Employment Record?

You may be surprised to learn that the answer to this question is yes—so long as you meet certain criteria: 

  • The marriage lasted at least 10 years; 
  • You are not married at this time; 
  • You have reached age 62; 
  • Your ex-spouse is entitled to receive Social Security benefits (retirement or disability)
  • If you are entitled to Social Security under your own employment record, the amount is less than you would be entitled to under your ex-spouse’s.

A divorced spouse is entitled to one-half of their ex-spouse’s full retirement amount or the disability benefit to which they are entitled, assuming the divorced spouse begins taking benefits at their full retirement age. What Social Security considers “full retirement age” depends on the year in which an individual was born. For people born in 1960 and afterward, full retirement age is 67. For those born between 1943 and 1959, full retirement age is between 66 and 67. 

Some people choose to increase their Social Security benefit by delaying their retirement beyond their full retirement age. If your ex-spouse is entitled to these “delayed retirement credits,” you will not receive any increase to your benefit as a result.

Will Remarriage Affect My Social Security Benefit? 

Yes. If you have remarried, you can no longer claim Social Security benefits based on a previous spouse’s employment record. If you later divorce your subsequent spouse, or are widowed or have the marriage annulled, you may once again qualify for Social Security benefits from your previous spouse’s employment record. 

How Do I Know If I Should Receive Benefits Under My Employment Record or My Ex's?

If you are eligible for Social Security benefits based on your own work record and on your ex-spouse's, what do you do? As you can imagine, this is not an uncommon situation, and here's how Social Security handles it: your retirement benefit, based on your work record, is paid first. If you would be eligible for a greater benefit based on your ex’s record, you will receive a supplemental payment so that your total benefit is equal to the higher amount. 

If you were born before January 2, 1954, and you have already reached full retirement age, you can claim benefits under your ex-spouse’s record, and put off receiving benefits based on your own work record, so that your monthly benefit will be greater when you do claim it. Unfortunately, if you were born on or after that date, you cannot defer filing for your own benefit and claim benefits under your ex-spouse’s record. 

If I Claim Benefits Based On My Spouse’s Employment Record, Does That Reduce Their Benefits?

Unlike a spouse’s employer-provided retirement plan that gets divided in divorce, claiming a Social Security benefit based on your ex-spouse’s employment record does not reduce the benefits they receive.

If your ex-spouse has not yet filed for Social Security benefits to which they are entitled, you may still be able to file for the benefit to which you would be entitled under their work record. However, you must have been divorced for at least two years to do so. 

Can I Claim Social Security Benefits If I’m Still Working? 

You can receive benefits and continue to work, but there is an earnings limit beyond which your benefit will be affected. Assuming you are under your full retirement age during the entire year, your benefits will be reduced by one dollar for every two that you earn above the annual limit. (In 2019, that limit is $17,640.)

Things change once you reach your full retirement age. In the year in which you reach that age, Social Security deducts one dollar for every three earned above a different limit, but only earnings from before the month in which you reach your full retirement age are counted. 

In the month in which you reach your full retirement age, and thereafter, your Social Security benefit is not reduced by your earnings.

If you have questions about divorce and Social Security or Medicare, we invite you to contact Mundahl Law to schedule a consultation to get your questions answered.