January 18, 2022

Your divorce can affect how much you receive from Social Security

As you retire, you may find that your current spouse no longer encompasses your ideal life.

You are not alone. According to the US Census Bureau, the divorce rate is highest among 55-64 year-olds.

It may seem insensitive, but it may be wise to put a stop to those plans to end your marriage – as doing so can give you a significant financial benefit.

You may be able to claim Social Security Retirement Benefits on your ex-husband’s work record. But according to financial planning experts, the timing of the divorce itself can be paramount.

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The pitfall is that divorced people can only access former spouses’ benefits if they were married for 10 years or more, according to David Freitag, a financial planning consultant and social security expert at MassMutual.

“That’s a huge, huge advantage,” he said.

Yet some people are not aware of this wrinkle. indeed, a MassMutual Poll conducted last year found that 30% of individuals were unaware that a divorcee might be able to receive Social Security benefits based on their ex-spouse’s earnings.

Why the 10-year mark is so important

For couples divorcing, the 10-year Social Security rule can make a huge difference.

During a presentation on Social Security, Freitag met a woman who had just been divorced after being married for nine years and six months.

“Had she waited six months, she would have had access to a substantial partner’s benefit from her ex-husband,” Freitag said.

If you claim a benefit from your ex-spouse, a so-called partner’s benefit is created, which amounts to a maximum of 50% of the pension benefit.

In 2022, the maximum monthly social security pension benefit is: $3,345 per month for those retiring at full retirement age. The difference between half of that — about $1,672 a month — and zero may be enough incentive for some couples in unhappy marriages to stick with it until they hit that 10-year anniversary, said Davon Barrett, a chief adviser and certified financial planner. at Francis Financial, a New York-based wealth management firm specializing in divorce planning.

Barrett has advised clients divorcing that they can withdraw their retirement benefits at their own work record or at half their spouse’s, whichever is higher. “That provides a little safety net in some people’s minds,” he said.

Should your ex-spouse die, you may have access to substantial benefits for the rest of your life.

David Freitag

financial planning consultant at MassMutual

Those benefits are also available to same-sex couples, provided they’ve been married for 10 years or more, Freitag noted.

What’s more, if you make a claim against your ex-husband and they remarry, you can still claim these benefits.

But if you remarry, it disqualifies you from claiming your ex-husband’s file. You must also be 62 years of age or older and entitled to a pension or disability benefit, according to the Social Security Administration.

What happens if your ex-husband dies?

If your ex-spouse passes away, you may be eligible for a so-called death benefit, which is worth up to 100% of monthly checks. The 10-year marriage rule also applies in this case.

“One day in the future, if your ex-husband dies, it’s entirely possible that you’ll have access to a significant benefit for the rest of your life,” Freitag said.

Here, too, certain other rules must be complied with. For example, if you remarry after the age of 60, this will not affect your entitlement to survivor benefits in your ex-spouse’s file.

Specifically, if you qualify for these strategies, it’s best to assume that you need to bring it to the attention of the Social Security Administration.

“When there is potentially that much money available, I think you should be your own advocate,” Freitag said.

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