EagleTribune.com, North Andover, MA

June 9, 2013

Social Security for divorced spouses

Financially Speaking
John Spoto

---- — One of the least understood facts about Social Security is that many divorced spouses are entitled to collect both spousal (your ex is living) benefits and survivor (your ex is deceased) retirement benefits on their ex-partner’s employment record.

This is true regardless of whether your ex has remarried. This can be especially good news for the lower-earning spouse, who then may be able to receive a larger Social Security benefit based on an ex-spouse’s work record than they can on his or her own. Social Security is gender-neutral so the rules apply in exactly the same manner to both men and women. Furthermore, your claim to benefits has no effect on what your former spouse or his or her current spouse (if remarried) receives.

The rules and eligibility criteria for Social Security are complicated, nuanced and vary depending upon which type of benefit you plan to collect, the age at which you begin collecting, your health and family circumstances, and whether you continue to work. There are hundreds of different possible scenarios, so the purpose of this article is to provide a good starting point to determine whether you can increase your retirement income as an ex-spouse.

To qualify for either spousal or survivor Social Security benefits as an ex-spouse, the following basic criteria must be met:

— The marriage lasted 10 years or longer.

— Your ex-spouse is at least 62 and is eligible to receive benefits based on his or her work history.

— You must be at least 62 to qualify for spousal benefits and 60 for survivor benefits

— You are unmarried (there are some limited exceptions to this rule). However, if your current marriage ends as a result of death, divorce or annulment, you would again be eligible.

— You are not entitled to receive a higher Social Security benefit based on your employment earnings.

— If your former spouse is eligible for a benefit, but has not yet applied for it, you need to be divorced for at least two years before you can begin collecting spousal benefits.

Spousal benefit (your ex-spouse is living): The spousal benefit you receive will be the higher of your own worker benefit or your spousal benefit. The exact amount of the spousal benefit you’ll receive depends on your age when you start drawing benefits. If you wait until your full retirement age (FRA), you will receive half of your former spouse’s full retirement amount. If on the other hand you begin collecting before your FRA, your benefit will be reduced.

Survivor benefit (your ex-spouse is deceased): If your ex-spouse is deceased, the eligibility rules for collecting are more lenient and the benefits more generous. For example, if you have attained your FRA, you will be able to receive 100% of your former spouse’s benefit. You can begin collecting as early as age 60 but at a reduced amount. The rules are even more lenient for surviving spouses who are disabled or are raising young children. If you are already receiving a benefit based on your own earnings record or spousal benefits while your ex-spouse was alive, once your ex dies, you can begin receiving the survivor benefit if it is higher.

Social Security is a source of inflation-adjusted income that will pay you for as long as you live. As a divorced spouse it is especially important to understand your benefit options so you can make an informed decision and maximize the amount you receive. Unfortunately because the Social Security statutes are written in confusing language and are filled with special exceptions depending upon a person’s specific circumstances, very few people are conversant enough to make such an informed decision.

Deciding when to collect and whether to collect based on your own work history or your former partner’s can have important implications for your retirement security, especially in your later years, so take care to make a smart decision.

John Spoto is the founder of Sentry Financial Planning in Andover and Danvers. For more information, call 978-475-2533 or visit www.sentryfinancialplanning.com.

This article is for general information purposes only and is not intended to provide specific advice on individual financial, tax, or legal matters. Please consult the appropriate professional concerning your specific situation before making any decisions.