When it comes to claiming Social Security benefits, there are numerous caveats and nuances to consider. Among these complexities lies a valuable quirk that can greatly benefit divorced spouses. In many cases, the monthly Social Security benefit that can be claimed based on a former spouse’s work history essentially doubles when they pass away. This unique opportunity was highlighted by Mary Beth Franklin, a certified financial planner and Social Security expert, at a recent conference in West Palm Beach, Florida.
Maximizing Social Security Benefits for Divorced Spouses
The concept of maximizing Social Security benefits also applies to married couples, especially for women in heterosexual relationships. This is because women tend to outlive their spouses and may retire with less wealth, making Social Security benefits crucial for financial security in old age. Natalie Colley, a certified financial planner based in New York, emphasizes the importance of Social Security as a lifetime annuity and one of the best financial protections against the uncertainties of retirement.
The federal government bases Social Security benefits on age and earnings history, allowing married couples to claim spousal benefits. The lower-earning spouse can receive a benefit worth up to 50% of their partner’s benefit at full retirement age. For example, if Sandy qualifies for a monthly retirement benefit of $1,000 based on her earnings record and a spouse’s benefit of $1,250, she would receive a total benefit of $1,250 at full retirement age.
Benefits for Divorced Couples
For divorced couples, the rules are similar when both individuals are alive. An ex-spouse is entitled to up to half of their former partner’s Social Security benefit, provided they are at least 62 years old, unmarried, and the marriage lasted for at least 10 years before divorcing. Claiming benefits based on an ex-spouse’s earnings record does not affect or reduce the former spouse’s benefits.
When claiming benefits based on an ex-spouse’s work history, it is essential to retain their Social Security number and marriage and divorce certificates for a seamless process. If the former spouse passes away, the surviving ex-spouse is eligible for up to 100% of the decedent’s benefit as survivors benefits. This safety net was created to provide financial security for individuals, especially women who traditionally stayed home to care for children.
Eligibility and Timing for Survivors Benefits
Remarrying after age 60 does not impact eligibility for survivors benefits, but doing so earlier disqualifies the individual. Survivors can claim benefits as early as age 60, two years earlier than traditional retirement benefits. However, waiting until full retirement age can result in higher benefits. Social Security designed these benefits to support individuals, particularly women who may have lacked retirement security due to not working throughout their lives.
By understanding and maximizing Social Security benefits, divorced spouses can secure financial stability in retirement and leverage the system’s unique opportunities for long-term security. It is crucial to be aware of the rules and requirements to make informed decisions regarding Social Security benefits as a divorced individual.