Social Security Benefits After Divorce

Social Security has been a hot topic in the news lately with all the talks about changing the tax policy. This is for good reason because based on the current projections the trust fund reserves will be depleted in 2035.

After this, the income from social security will cover roughly 79% of the benefits needed. That means something will likely happen before then with social security reform. Everyone’s situation is different as to when to claim benefits but divorced individuals have a unique set of circumstances to consider.

Social Security Benefits for Married Couples

Typically, you can apply for social security benefits between the ages of 62 to 70. If you’re married, you have the option to claim benefits on your record as well as your spouse’s record.

You are eligible to receive ½ of your spouse’s benefits if they are higher than your individual benefit. If you file between age 62 and full retirement age you will receive a reduced benefit.

Social Security Benefits After Divorce

If you get divorced your ex-spouse can file a claim under your record if they meet the following criteria:

  • Your marriage lasted 10 years or longer.
  • Your ex-spouse is unmarried.
  • Your ex-spouse is age 62 or older.
  • The benefit that your ex-spouse is entitled to receive based on their own work is less than the benefit they would receive based on your work.
  • You are entitled to Social Security retirement or disability benefits.

If you’re divorced, you were married for 10 years, and you have NOT remarried you may be able to apply for benefits under your spouse’s record. The maximum you are eligible for is ½ of their full retirement benefit. If you apply before full retirement age this amount will be reduced.

When to Apply for Social Security

This depends on how badly you need the money and your life expectancy. If you have good family genetics, plan on living to age 100, and don’t need the money to cover expenses you will likely do best by delaying until age 70.

Your benefits will grow by 8% each year by delaying. This may or may not be more than your ex-spousal benefit. The maximum you can receive is ½ of your ex-spousal benefit based on their full retirement age. Your benefit will grow beyond FRA but theirs will not. You will need to do the math on your situation to determine the best-case scenario.

How to Apply

You can visit the website here to apply for benefits online. The process only takes 30 to 45 minutes and is pretty straightforward. You can also call them or go down to your local office to get help in person.

How to Calculate Social Security Benefits

You can request transcripts online to see your earnings records for your working career. They will take into account the highest 35 years of earnings. I’d recommend reviewing your transcripts periodically to determine their accuracy. It’s not uncommon that an administrative error is made in reporting your earnings or what you’ve paid into social security.

Your transcripts will show how much you will be eligible for at age 62 and full retirement age. This will give you an idea of how much you will receive. This is helpful when planning for a budget in retirement. This will be a good starting point to determine if your benefits will be more on your record or by filing on your ex-spouse’s record. You may need to contact the SSA to get your ex-spouse’s record.

The SSA has many calculators online pertaining to various needs. You can access them here. You can calculate your earnings, your retirement benefit, your spouse’s benefit, and others.

Everyone’s situation is unique and it can be difficult to know what the best path forward is. I’d recommend meeting with a social security benefits expert through the SSA or finding an advisor that can help you make an informed decision. There’s no one size fits all so what may be best for one person doesn’t mean it’s best for everyone.

If you’d like an objective second opinion about your finances, please contact Michael Shea, a CERTIFIED FINANCIAL PLANNER™, at Applied Capital. Email him at [email protected] or fill out a contact form.

This blog is provided for informational purposes only. Such views are subject to change at any point without notice. The information in the blog should not be considered investment or tax advice or a recommendation to buy or sell any types of securities. Some of our blogs or information therein have been obtained from third party sources believed to be reliable but such information is not guaranteed. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular investor’s financial situation or risk tolerance. No reliance should be placed on, and no guarantee should be assumed from, any such statements or forecasts when making any investment decision.

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