Divorced Spouses Maximize Social Security Benefits By Navigating Some Tricky Rules

There’s no such factor as “divorce advantages” in Social Safety, however divorced spouses typically are eligible to obtain advantages based mostly on an ex-spouse’s earnings document.

Ex-spouses typically high quality to obtain Social Safety spousal advantages, and on pretty liberal phrases. Divorced spouses generally have higher choices and extra flexibility than present spouses.

However small variations in timing can go away a divorced partner with out advantages, or with decrease advantages than can be obtainable with completely different timing.

Social Safety spousal advantages might be collected on the earnings document of a former partner when the wedding lasted no less than 10 years, the couple has been divorced no less than two years (usually), and the ex-spouse claiming the advantages nonetheless is single (usually). As well as, each ex-spouses should be no less than age 62.

When the {qualifications} are met, a divorced individual might independently declare advantages on the earnings historical past of the opposite former partner.

It doesn’t matter whether or not the previous partner whose earnings historical past is the idea of the declare is already receiving retirement advantages. The ex-spouse whose earnings are the idea of the declare isn’t consulted, might be remarried, and isn’t knowledgeable that the previous partner is claiming advantages.

The spousal advantages drawn by an ex-spouse don’t have an effect on the quantity of the advantages paid to the employee or any present partner of the employee. Which means three or extra individuals can declare advantages based mostly on the identical employee’s earnings document.

A divorced partner can declare the upper of both his or her earned retirement advantages or spousal advantages based mostly on the opposite ex-spouse’s earnings document.

To maintain it easy, let’s say the previous spouse is contemplating claiming spousal advantages on the earnings document of the ex-husband.

The spousal profit for the ex-wife is 50% of the ex-husband’s full retirement age profit, if the ex-wife doesn’t declare the advantages till no less than her full retirement age. The quantity of the spousal advantages doesn’t range with the ex-husband’s age, so long as he’s no less than 62.

However the ex-wife’s spousal profit might be lowered if she claims the spousal advantages earlier than her full retirement age. The truth is, the speed of discount for claiming spousal advantages earlier than full retirement age is bigger than for claiming one’s personal retirement advantages early.

The spousal profit is lowered by 8.33 % yearly for the primary three years advantages are claimed early (that’s 25/36 of 1 % for every of the primary 36 months) and 5 % for every extra yr (that’s 5/12 of 1 % for every extra month). A divorced partner who claims the spousal profit at age 62, could have the profit lowered by 30 % whereas a retirement profit claimed at 62 is lowered by solely about 25 % from the complete retirement age profit.

An ex-spouse doesn’t obtain a rise in advantages by ready to assert spousal advantages after his or her full retirement age. There’s additionally no benefit to ready till the opposite ex-spouse claims retirement advantages, even when that declare gained’t happen till age 70. In all instances, the spousal advantages to an ex-spouse are maximized at one-half the opposite partner’s full retirement age profit when the ex-spouse claiming the advantages reaches his or her full retirement age. There’s no enhance for claiming after both partner is older than full retirement age.

When the two-year divorce requirement hasn’t been met, a former partner nonetheless can accumulate spousal advantages on the earnings historical past of the opposite ex-spouse if the opposite ex-spouse has filed to assert his or her retirement advantages.

To assert advantages on the earnings historical past of an ex-spouse, you may’t be remarried on the time the declare is filed. It doesn’t matter what age you’re, how lengthy you had been married, or how lengthy you’ve been divorced. If you happen to remarried, and nonetheless are remarried, you may’t declare advantages on the earnings historical past of an ex-spouse. You possibly can declare advantages solely by yourself earnings document or that of your present partner.

This remarriage rule for ex-spouses is completely different from the principles for survivor’s advantages and so is a supply of confusion.

The remarriage rule can discourage some older {couples} from marrying and in some instances can encourage a married couple to divorce.

An fascinating twist is that you simply solely need to be single on the time you file for spousal advantages. Suppose you divorce partner #1, after which marry partner #2. You then divorce partner #2. You’re now eligible to obtain spousal advantages based mostly on the earnings historical past of partner #1, offered the 2 of you had been married greater than 10 years and divorced greater than two years, since you’re at the moment single.

Underneath the Social Safety guidelines, once you file for any profit (aside from survivor’s advantages) you’re deemed to have filed for all advantages for which you’re eligible. The Social Safety Administration will compute all the advantages and pay you the very best, offered it has full details about all of your ex-spouses.

An ex-spouse can also declare survivor’s advantages as if the couple had been nonetheless married on the time the opposite partner handed away. The surviving ex-spouse additionally has the appropriate over time to change from survivor’s advantages to retirement advantages, or vice versa.