According to the Social Security Administration (SSA), 96% of American workers are covered under Social Security. If you’re one of the many who are eligible to collect Social Security benefits in retirement, it’s important to understand how the system works.
If you’ve been married, spousal benefits can be a significant component of Social Security. Even if you’ve never worked or have low earnings, you can collect up to half of your spouse’s full benefit if he or she qualifies for Social Security. Moreover, you don’t necessarily lose that benefit if you’re divorced. Therefore, it’s helpful to know your rights, as the benefits you’re able to collect following a divorce may impact your individual retirement plan.
If you’re divorced, here are a few considerations to keep in mind regarding your Social Security benefits:
- You’re Still Entitled to Your Spousal Benefits if Certain Conditions Are Met
If you’re divorced but your marriage lasted at least 10 years, you can still collect benefits on your ex-spouse’s record, even if he or she has remarried. To do so, the following conditions must be met:
- You are unmarried
- You’re age 62 or older
- Your ex-spouse is entitled to Social Security benefits (retirement or disability)
- Your benefit is less than your spouse’s benefit
As a divorced spouse who meets these four requirements, your benefit can be equal to half your ex-spouse’s full retirement amount or disability benefit, if you start collecting benefits at your full retirement age. Although you’re eligible to start taking Social Security at age 62, full retirement age is now 67 for anyone born after 1960. Benefits taken before full retirement age are reduced accordingly since you’re extending the period over which you collect.
In addition, if you meet the above requirements, you can receive benefits on your ex-spouse’s record even if he or she has not yet applied for them, so long as you’ve been divorced for at least two years.
- Changes to Your Eligibility for Spousal Benefits if You Remarry
If you decide to remarry, you generally give up your rights to collect Social Security on your ex-spouse’s record. However, you may be able to collect your new spouse’s benefits if you’re at least 62 years of age and your spouse is receiving Social Security benefits. In the event your new marriage ends due to death, divorce, or annulment, you may again be eligible to collect on your first spouse’s benefits.
If you’ve married and divorced more than once, and each marriage lasted at least 10 years (and you meet the SSA’s four criteria above), you may claim benefits against whichever ex-spouse provides you with the highest benefit. However, you can only collect on one ex-spouse’s record.
- If You Qualify for Retirement Benefits on Your Own Record, the SSA Pays Your Benefits First
If you meet the earnings requirements to qualify for Social Security benefits, the Social Security Administration will always pay your benefits first. However, you’re still entitled to your ex-spouse’s benefits, provided his or her earnings record is higher, and the other previously mentioned conditions are met. When this is the case, you’ll receive an additional benefit payment on your ex-spouse’s record. The combination of benefits is equal to the highest amount you’re eligible to collect.
There may be caveats to these guidelines based on your birth year, when you decide to begin collecting your benefits, and whether you work while collecting Social Security, among other factors. The Social Security Administration provides a multitude of helpful resources on its website, including a retirement benefit estimator, which can help you determine your eligibility. In addition, it may be helpful to work with your wealth advisor to establish the best approach for taking Social Security after a divorce given the changes to your financial circumstances.