Social Security and How It Affects Your Divorce

Know your options when it comes to your Social Security benefits if you are divorced and nearing retirement age. A financial professional can help.
Know your options when it comes to your Social Security benefits if you are divorced and nearing retirement age. A financial professional can help.

by Tracy S. McKenney, CFP®, CDFA™
Irvine, California

When a couple divorces, you may wonder whether anything happens to their Social Security benefits. What if the husband has been employed the entire marriage and the wife has stayed home with the children? Do they split the husband’s Social Security benefit at retirement? What if one of them remarries?

First, divorce laws are different from state to state. Social Security is a federal program and can’t be overridden by

Orange County Divorce Financial Analyst Tracy McKenney

Tracy McKenney

divorce laws or a divorce judgment in any individual state including California. California courts cannot issue a divorce judgment to ‘split’ Social Security payments at retirement, because the federal rules governing Social Security override them.

What does the law say about Social Security and Divorce?

As of summer 2016, if a person has been married longer than 10 years and then gets divorced, the ex-spouse can receive 50 percent of their former spouse’s Social Security benefit –OR- 100 percent of their own Social Security benefit. Notice: you can collect only ONE benefit, not both.

For example, “Dolly” and “Dennis” got divorced when Dolly was age 52, and Dennis was age 54. Dennis decided to start collecting Social Security when he turned 67. Dolly only worked part-time for most of their 27 year marriage. She decided to start collecting Social Security benefits as soon as possible, at age 62. Dennis collected on his own benefit because it was higher than ex-spouse Dolly’s benefit. Dolly made an appointment with her local Social Security office two months before she turned age 62. Dennis’s benefit was higher than hers so she collected based upon his benefit. Note: Anytime you start social security earlier than your full retirement age (see more below), you will receive a reduced benefit.

Before your ex-spouse gets angry over losing half of his or her government retirement benefits, the Social Security Administration is willing to pay out 100 percent to your ex-spouse and 50 percent to you from your ex-spouse’s work history. Yes, Social Security will pay 150 percent if you meet the qualifications.

Social Security payments can start as early as age 62. Your monthly payments are reduced at age 62. Full Retirement Age (FRA) is based upon your birth year. FRA is age 65 for anyone born before 1937; 66 for anyone born 1943-1954; and age 67 for anyone born 1960 or later. You can look up your own FRA at www.ssa.gov.   Be aware the FRA age for you personally is based upon YOUR age, not your ex-spouse’s age.  If you delay claiming Social Security benefits until age 70, you will receive additional income if you claim on your own work history, but will NOT receive additional income at age 70 if you claim based upon your ex-spouse’s work history.

Remarriage Affects Your Retirement Benefits

What happens if either ex-spouse remarries? If you remarry before age 60, then you will not be able to claim benefits based upon the ex-spouse’s work history. If you remarry after age 60, then you can claim based upon your ex-spouse, your current spouse or your own work history. Choose wisely because you only get ONE benefit. If you have been married over 10 years more than once, -you can claim on either ex-spouse, whichever is more favorable to you.

What happens if your ex-spouse dies?

Social Security has survivor benefits if your ex-spouse dies. If you are eligible to claim on your ex-spouse’s work history, then you also qualify for a survivor benefit. You can receive the same benefits as the widow/widower of your ex-spouse.

For more information, go to www.ssa.gov and search ‘divorced spouse benefits’ or ‘divorced survivor benefits.’

Securities offered through Securities America, Inc., a Registered Broker/Dealer, Member FINRA/SIPC.  Tracy S. McKenney, Registered Representative.  Advisory Services offered through Securities America Advisors, Inc., an SEC-Registered Investment Advisor. Securities America and its representatives do not offer tax or legal advice. You should consult with and rely on your own legal and tax advisors. 6/2016