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Divorce Resources for Women

What You Need To Know About The Divorced Spouse Social Security Benefit

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A big part of divorce is figuring out the impact ending your
marriage will have on your finances. The obvious concerns are what it means for
your present lifestyle, but you can’t ignore the consequences on retirement. That
means understanding the Divorced Spouse Social Security benefit. There are lots
of rules and caveats for this benefit and it’s hard to remember them all …

Joining me for this Conversation is Leah Hadley from Great Lakes Financial Solutions. Leah
is a seasoned financial professional and is committed to helping her clients
make wise financial decisions before, during and after divorce. Leah as a free Divorce
Recovery: A Financial Guide To Moving On
available for download.

Listen in or keep reading to learn more.

What Is The Divorced Spouse Social Security Benefit?

In a nutshell, if your marriage lasted 10 years or longer,
you may be eligible to collect on your ex spouse’s social security record.

You might think this would set the stage for some arguments
in the divorce negotiations but another important fact to know is that your
spouse’s social security benefit is completely unaffected.

“In fact, your ex does not need to know that you’re
collecting on their record at all,” said Hadley. “You don’t need to contact
them. You just work directly with the social security office to make it happen.”

Ten Years Is A Magic Number

The first hurdle you have to get over to qualify for the benefit
is that your marriage lasted for at least ten years.

“I’ve seen some cases where people were just a few months
shy of that 10-year mark,” said Hadley. “If they could have just extended out
even just the process a little bit longer, they would have been eligible for
the benefit.”

This is one reason to consider a legal separation instead of a divorce. A legal separation means you are still married (and not free to marry anyone else) and so that could help you over that 10-year hurdle.

Know Your Benefit

If you’re serious about understanding the financial impact of divorce, then you want numbers. That starts with pulling your own social security statement. It’s easy. Go to ssa.gov, create a login and then you can access your statement anytime.

It’s actually a good practice to access your statement every
year. Doing that will allow you to verify your earnings record and watch that
the SSA hasn’t made a mistake.

But it’s not just your statement you want. You want your
STBX’s as well. And in a perfect world, they would voluntarily share it with
you during the divorce negotiations. If they’re not willing to do that, you may
have to enlist some legal help.

How Much Is The Divorced Spouse Social Security Benefit?

The divorced spouse’s benefit is equal to half your spouse’s
benefit.

“You actually first claim your benefit and then Social
Security will be paying you the difference between the two,” said Hadley. “If
50 percent of your ex’s benefit is higher than yours, you would want to make
sure you claim both benefits.”

Unlike your own benefit, if you delay claiming the divorced
spouse benefit, there is no increase in the amount that is payable.

When Can You Claim?

Like so much else with Social Security, when you can claim
the divorced spouse benefit depends on several factors.

First, you have to be eligible to collect Social Security in
your own right which could be early retirement age of 62, could be standard retirement
age or even later. You also need to have been divorced for at least two years.

Then, your ex must also be eligible to collect.

“If your ex is eligible for social security but is choosing
not to collect on it, you still can collect on their record,” said Hadley. “You
don’t have to wait until they’re taking it.”

Now, if your ex is younger than you, then you would start
collecting social security on your own record and then when your ex becomes
eligible, you can start collecting any additional amount from that benefit.

Whether you should start claiming social security as soon as you’re eligible needs to be determined in the bigger context of your overall financial plan.

What If Your Ex Dies?

Being eligible for the divorced spouse social security
benefit sounds great but what if your ex dies before you can start drawing that
benefit?

Hadley says that in this case, provided you were married for
that magic 10-years, you may be eligible for a surviving divorced spouse benefit.
That benefit is similar to a widow or widower’s benefit and may mean you can
get the full amount of ex’s benefit.

Be Careful About Getting Remarried

To be able to claim the divorced spouse benefit, you have to
be unmarried at the time you claim it. The surviving divorced spouse benefit
however is available even if you remarry after the age of 60.

It’s also possible that once you do remarry, your benefit
would change to be driven by your current spouse’s record. So, before you
actually say, ‘I do’ again, it would be smart to check with Social Security on
what will happen to your benefit.

If You Have A Public Pension The Rules Are Different

If you work in a job where you are contributing to a public
pension arrangement, then you may not be eligible for any social security or a
very limited amount. Typically, these public pensions cover teachers, police
officers, and fire service personnel, for example.

There is a calculator on the Social Security Administration’s
website that can help you figure out if you’d get a social security benefit.

Hadley points out that the division of assets should be
handled differently if there is a public pension because a public pension is a
divisible asset in divorce and social security is not.

If one person is contributing to that pension and not
contributing to social security, and their spouse is contributing to social
security” said Hadley, “it may not be real equal if you just divide the pension.”

Simply dividing the pension, means each spouse gets half the
pension while the one spouse still gets their full social security benefit in
addition. What may be more equitable would be to offset the public pension
benefit by the social security benefit and then divide the remaining
difference.

Get Expert Help

Understanding the divorced spouse benefits from Social Security
is going to be helpful in assessing the impact of divorce on your financial
future. When it comes to deciding whether to start drawing the benefit, you
will want to ger some expert advice.

You can start by visiting the SSA.gov website and playing around
with the calculators available online. You can also visit your local Social
Security office although Hadley says getting accurate advice can be hit or
miss. For that reason, she often advises two visits and dealing with different
people.

You may also find it helpful to work with a financial
planner who has a social security planning background.

Joining me for this Conversation is Leah Hadley from Great Lakes Financial Solutions. Leah is a seasoned financial professional and is committed to helping her clients make wise financial decisions before, during and after divorce. Leah as a free Divorce Recovery: A Financial Guide To Moving On available for download.

 

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