If you are over 50 and considering divorce, you are probably overwhelmed by the prospect of making such a major life change at this point in your life. You might be thinking about retiring in the not-so-distant future and are wondering how you will support yourself during this next stage in your life.
You are not alone. Divorce has never been more common among the 50 and over set. The Wall Street Journal recently noted that while divorce rates among younger couples have decreased in recent years, divorce rates for baby boomers have dramatically increased. Here we will discuss some of the major issues facing couples over 50 years old in divorce, starting with Social Security.
Social Security Benefits Are Usually Based on Your Work History
One of the most common issues that we see when we are dealing with older couples is Social Security retirement benefits. It is important to consider Social Security as a potential source of income for both spouses after divorce, especially those that are considering retirement and facing life on a fixed or reduced income. The amount of Social Security that an individual is entitled to is normally based on his or her work history.
However, under the Social Security law, after you are divorced, you may be entitled to a portion of your ex-spouse’s Social Security retirement benefit based on his or her work history provided certain conditions are met. This is often a surprise to some couples and can be especially beneficial to a spouse in a long-term marriage who might have remained at home to raise the children while the other spouse worked outside of the home and earned the majority of the household income. In this case, in lieu of collecting on his or her own work history, the lower-earning spouse may be able to collect a portion of the higher-earning spouse’s Social Security retirement benefits based on the higher-earning spouse’s work history.
If you are divorced, you can receive Social Security retirement benefits based on your ex-spouse’s work history if the following requirements are met.
1. The marriage lasted 10 years or longer;
2. You are currently unmarried;
3. You are age 62 or older;
4. Your ex-spouse is entitled to Social Security retirement benefits (i.e., he or she is 62 or older and has a long enough work history to receive benefits); AND
5. The benefit you are entitled to receive based on your own work history is less than the benefit you would receive based on your ex’s work history. In other words, your benefit must not exceed half of your ex-spouse’s benefit.
If the above requirements are met, you would be eligible to collect 50% of your ex-spouse’s Social Security retirement benefits so long as you begin collecting at your full retirement age. Full retirement age is the age at which you are entitled to become entitled to full or unreduced Social Security retirement benefits. Currently, if you were born in 1937 or before, your full retirement age is 65. The full retirement age continues to increase with each subsequent birth year so if you were born in 1960 or later, your full retirement age is 67.
If you want to get an estimate of what your Social Security benefit would be under your ex-spouse’s work history, you can go to your local Social Security Office or call Social Security to make an appointment.
You will need to show your marriage certificate, and a divorce decree to prove that your marriage lasted at least 10 years. You will also have to provide your ex-spouse’s Social Security number or if you don’t have that, his or her date and place of birth and his or her parent’s names so that Social Security can locate his or her record.
While many older couples getting divorced have been married for twenty or more years, in shorter-term marriages, it is important to remember the 10-year rule (that a marriage must have lasted 10 years or more to collect under your spouse’s benefits). It may be beneficial to intentionally delay the final divorce decree until the marriage has lasted ten years. This will allow both spouses to potentially qualify for benefits under the other’s Social Security work history. It is also important to remember you can collect under either your own or your ex-spouse’s benefits, not both (at least not at the same time).
The Social Security Laws can be extremely complex and provide a seemingly endless possibility of options for how and when you can receive your benefits. It is important to have a basic understanding of all of the options available to you in order to maximize your potential benefit, especially if you are nearing retirement and contemplating divorce.
Examples of Social Security Benefits For People Over Age 50
For example, if your ex-spouse is age 62 or over but is not retired, you may still be able to collect under his or her Social Security benefits so long you have been divorced for over two years. If your ex-spouse is not age 62 or over, you can collect your own Social Security benefits when you are eligible to do so and then switch over to your ex-spouse’s benefits when he or she becomes eligible.
So what happens if one or both spouses remarry? You can still collect a portion of your ex-spouse’s Social Security benefits even if your ex-spouse has remarried. However, if you remarry, you will be unable to collect on your ex-spouse’s benefits unless your remarriage ends by death, divorce, or annulment. In that case, you may be able to collect the greater of (1) your Social Security benefit based on your own work history; (2) a portion of your first spouse’s Social Security benefits based on his or her work history; or (3) a portion of your second spouse’s Social Security benefits based on his or her work history, assuming all of the other requirements are met. Finally, it should be noted that if your ex-spouse collects Social Security under your work history, it will not affect the number of benefits you or your current spouse are entitled to receive.
Under the Social Security Law, an ex-spouse receives the same benefits as a widow or widower. These are called survivor benefits. The ex-spouse can start collecting Social Security survivor’s benefits as early as age 60 (instead of age 62). Further, if you remarry after reaching age 60, you can still continue to receive your ex-spouse’s Social Security survivor benefits.
What if you are eligible to collect your ex-spouse’s Social Security retirement benefits but want to continue working and postpone your own retirement in order to maximize your own benefits? You can file what Social Security calls a “restricted application.” That means you can first collect Social Security retirement benefits as a divorced spouse under your ex-spouse’s work history and then wait to claim your own retirement benefits. You can only do this if the following requirements are met:
- You were born before January 2, 1954;
- You have reached full retirement age (currently age 66);
- You were married for at least 10 years to your ex-spouse;
- You are currently unmarried;
- Your ex-spouse has filed for his or her own Social Security retirement benefits (i.e., he or she is 62 or older and has a long enough work history to receive benefits); AND
- You have been divorced for at least two years.
These are just some of the many options couples can choose from as they near retirement. It is important to try to figure out the best option for Social Security. As you can see, the laws are complicated and can require some strategic planning in order to maximize benefits, especially when you are nearing retirement age and considering divorce. At SnapDivorce, our attorney mediators are experienced in dealing with Social Security retirement benefits in divorce. We can help you figure out the most advantageous way to move forward with your divorce while maximizing the potential Social Security retirement benefits to which you may be entitled.