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Understanding Social Security Benefits and Divorce

Understanding Social Security Benefits and Divorce

July 28, 2023

We understand that Social Security benefits play a considerable role in both the immediate and long-term financial well-being of individuals, particularly in the context of divorce. To effectively negotiate a successful divorce settlement while also considering the stability of your financial future, it is essential to grasp the rules and implications surrounding these benefits.

Whether looking to optimize Social Security claiming strategies or assessing when to begin receiving benefits, a Certified Divorce Financial Analyst (CDFA®) can help guide you through these questions or concerns using educational resources, retirement income planning strategies, and comprehensive financial analysis. Whether you are a family law attorney or an individual considering divorce, we aim to provide you with valuable insights into navigating Social Security benefits in divorce.  

Here are some key factors to consider as it relates to Social Security benefits and divorce:

  • Age Requirements: To begin receiving individual Social Security retirement benefit or a spousal benefit based on an ex-spouse’s record, the individual must be at least 62 years old. It’s critical to understand that claiming benefits early will result in a lifetime reduction to any Social Security benefits the individual is eligible to receive.
  • Duration of Marriage: To be eligible for a spousal benefit based on an ex-spouse’s record, the marriage must have lasted for at least ten years.
  • Eligibility of Ex-Spouse: To collect a spousal benefit based on an ex-spouse’s record, the ex-spouse must be entitled to (receiving) Social Security benefits, or they must have reached the age of eligibility if the marriage has been dissolved for at least two continuous years.
  • Impact on Ex-Spouse: Claiming Social Security benefits based on an ex-spouse’s record does not affect the ex-spouse’s Social Security benefits or the benefit eligibility of a past or subsequent spouse.

One creative strategy to maximize Social Security benefits for divorced spouses could involve initiating benefits early.  This is based on the individuals record and subsequently switching to a spousal benefit when their ex-spouse starts receiving Social Security benefits or is eligible to collect benefits after being divorced for two consecutive years. It’s important to note that this switch is not automatic and must be applied for.

Another common Social Security benefit that is often overlooked at the time of divorce is the widow or widower’s benefit.  Upon the death of a former spouse, an individual may be eligible to collect a payment of up to 100% based on an ex-spouse’s record.  As long as the individual is unmarried at the time the widow or widower’s benefit is claimed, is at least age 60 (50 if disabled), and the individual meets the 10-year marriage requirement discussed above the individual could receive benefits from Social Security no different than a surviving spouse.

It’s important to note, like a spousal benefit, a surviving divorced spouse benefit will not affect the benefit amount other survivors may be eligible to receive. It’s also important to note that Widow and Widowers benefits are not paid automatically by the Social Security Administration and must be applied for. 

Staying informed and aligning with the right professional who can assist is crucial to successfully navigating the complexities of Social Security benefits and divorce.

At Divorce Smart, we can provide valuable guidance specific to your circumstance and together navigate this intricate landscape to ensure you are well-informed about your financial future. We hope you find this information beneficial in your journey.