retirement

Claiming Social Security After a Divorce

Even though the marriage is over, you may be entitled to claim benefits based on the earnings record of your ex-spouse.

EDITOR'S NOTE: This article was originally published in the March 2010 issue of Kiplinger's Retirement Report. To subscribe, click here.

If you're divorced or soon to be, would you like to hear some happy news? If you were the lower earner, you're probably entitled to Social Security benefits on your former spouse's earnings record. And it won't cost your ex a penny.

To be eligible for a spousal benefit on an ex-spouse's record, you must have been married for at least ten years and be at least 62. If you remarry, you will lose the benefits of your former spouse, at least until that second marriage ends in divorce or death.

If that happens, you may be able to select the best benefits among your former spouses. "If you were married two or three times, you can choose the spouse that has the highest benefit," says Sara Stolberg, a Lincolnshire, Ill., certified financial planner who specializes in divorce planning.

For the most part, the Social Security rules for divorced couples are the same as those for married couples. For instance, if you collect a spousal benefit when you are at full retirement age, it's generally 50% of your ex-spouse's benefit. The benefit will be reduced by a certain percentage for each month you collect before you reach full retirement age. "The longer you can wait, the more you will get," says Barbara Shapiro, president of HMS Financial Group, in Dedham, Mass., and a specialist in divorce issues.

One difference: Even if your ex-spouse has not applied for benefits, you may be allowed to collect spousal benefits. To qualify, your former spouse must be eligible for benefits, which means he or she must be at least 62, and you must have been divorced for at least two years.

Because divorced women tend to be the lower earners, they usually have the most to gain from these rules. But there are times when high-earning ex-husbands can take advantage of these benefits, too.

Next year, when he turns his full retirement age of 66, Steven Wertime says he intends to apply for a 50% spousal benefit on his ex-wife's earnings record. The couple was divorced in 1988 after 20 years of marriage. When he turns 70, Wertime, who is single, will apply for his own benefit, which, because of four years of delayed retirement credits, will be 32% higher than his benefit at his full retirement age.

"Why not allow my own benefit to accumulate?" says Wertime, a certified financial planner with his own firm in Falls Church, Va. "I'm assuming I will have a long life expectancy." (If you're the higher earner, you must be full retirement age to be able to choose between a spousal benefit and your own benefit.)

Claim a Survivor Benefit When Your Ex Dies

If your ex-spouse dies, you could get a survivor benefit if your marriage lasted ten years or more. You can start receiving a survivor benefit as young as age 60, or age 50 if you are disabled.

If you are full retirement age when you collect, the survivor benefit will be 100% of the deceased ex-spouse's benefit. The benefit will be reduced if you claim it earlier. If you are already receiving a benefit based on your own earnings record, you will continue to receive your benefit plus a check for the difference between your benefit and the survivor benefit. And if you were collecting a spousal benefit on your ex-spouse's record, you can switch to a survivor benefit if the ex dies. If you remarry after age 60, you can still receive the survivor benefit.

Timing can be crucial. Shapiro had a client who was getting divorced just short of her tenth anniversary. She spoke with the lawyer of her client's husband and they pushed back the date of the final divorce decree.

You may also be eligible for free Medicare Part A benefits based on your ex-husband or ex-wife's earnings record, which could be valuable if you haven't accumulated enough Social Security credits to be eligible for Medicare on your own.

You will need to provide a certified copy of your divorce decree to claim benefits. To expedite your application, you should have your ex-spouse's Social Security number, too. Social Security will not notify your ex. Your claim will not affect your ex's benefits at all, nor the benefits of a new spouse of your ex.

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