Things You Didn’t Know About Divorce and Social Security

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picture of small child placing money into a white piggy bankDividing assets during a divorce is often very ugly. This is especially true if you live in a marital property state such as Wisconsin. Because Social Security isn't a dividable individual account, special rules apply to an ex-spouse's claim on Social Security benefits.

For example, let's assume you stayed at home while your spouse worked a typical job paying into Social Security. 

As long as the marriage lasted at least 10 years before your divorce, and you're not currently married, you're entitled to 50% of your ex's full retirement age benefit as long as you wait until the age of 66 to claim benefits. It doesn't matter if your spouse has started to receive benefits or not.

The next typical question is if receiving benefits impacts the wage-earner ex-spouse and the answer is no. They still receive their full benefit based on the age they begin drawing their check.

Usually, both spouses have some benefits coming, and that's when it really becomes interesting. 

If you wait until your full retirement age of 66 to claim Social Security AND limit your claim to spousal benefits only, just as if you're still married, you can collect 50% of your ex-spouse's benefit until you turn 70. You can then switch to your own benefit. Because you earn 8% per year in bonus credit for each year of delay after age 66, for up to four years, you're eligible for 132% of your full retirement age amount.

If your benefits are comparable to your ex-spouse's, it's like receiving your retirement cake and getting to eat it too. First you collect 50% for four years, then you move up to 132% of your own. Meanwhile you have no impact on how much your ex receives (which can be a positive or negative depending on your point of view).

According to the Social Security Retirement Planner:

If you are divorced, but your marriage lasted 10 years or longer, you can receive benefits on your ex-spouse's record (even if he or she has remarried) if:

  • You are unmarried;
  • You are age 62 or older;
  • Your ex-spouse is entitled to Social Security retirement or disability benefits and
  • The benefit you are entitled to receive based on your own work is less than the benefit you would receive based on your ex-spouse's work.

Note: Your benefit as a divorced spouse is equal to one-half of your ex-spouse's full retirement amount (or disability benefit) if you start receiving benefits at your full retirement age.

If you remarry, you generally cannot collect benefits on your former spouse's record unless your later marriage ends (whether by death, divorce or annulment).

If your ex-spouse has not applied for retirement benefits, but can qualify for them, you can receive benefits on his or her record if you have been divorced for at least two years.

If you are eligible for retirement benefits on your own record we will pay that amount first. But if:

the benefit on his or her record is a higher amount, you will get a combination of benefits that equals that higher amount (reduced for age)

 

Note: The benefits do not include any delayed retirement credits your ex-spouse may receive.

  • you have reached full retirement age and you are eligible for a spouse's benefit and your own retirement benefit, you have a choice.

    You can choose to receive only the divorced spouse's benefits now and delay receiving retirement benefits until a later date. If retirement benefits are delayed, a higher benefit may be received at a later date based on the effect of Delayed Retirement Credits.

If you:

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