For many of my baby boomer clients who are close to retirement, calculating their Social Security Benefits is an important part of the financial planning process.
It’s important to have a good understanding of the monthly benefit so that we know which other retirement buckets will be producing the shortfall (if any) of their income needed for retirement.
In many of my client situations, the husband has been the primary breadwinner, so there isn’t much question on their Social Security Benefit.
What does raise some questions is the spouse’s social security benefit. It can be confusing in situations where the spouse worked some years back and is not totally sure how much they paid into social security.
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If you are married, you can claim social security benefits based on your history of earnings or you can collect Social Security spousal benefits which are equal to 50% of your spouse’s Social Security benefit.
There are several advantages for married couples and their social security benefits, and you have the ability to receive benefits for a longer period of time in some cases.
If you’re a widow, you can also claim social security spousal benefits.
How Social Security Spousal Benefits Work
You have the option of claiming your own social security benefits, calculated from your work record, or claiming up to 50% of what your husband or wife will receive as your spousal benefit if your husband or wife has filed for social security.
You can’t collect both your own social security benefits and your spousal benefit at the same time. If you are entitled to both, you’ll receive the larger of the two.
A widow who collects survivor benefits at the normal retirement age (or later) will receive 100% of the deceased spouse’s social security benefit.
If you file for social security spousal benefits between the age of 60 and your normal retirement age, the amount you receive will shrink from 71 to 99%.
It’s always better to delay receiving social security benefits for as long as possible to increase the amount you’ll receive.
Early Retirement and the Social Security Spousal Benefit
If you begin collecting the spousal benefit before you reach full retirement age, the benefit is permanently reduced over your lifetime.
Before selecting this option, it’s important to understand the implications of having the reduced benefit so early on in your life.
Widows and Social Security Benefits
If your spouse passes away, you’re eligible for the spousal benefit from the age of 60.
If you begin receiving social security benefits before your spouse passes away, you will continue receiving whichever benefit is greater – your own social security benefit or the spousal benefit – but you can’t get both at the same time.
Advantages for Married Couples and Social Security Benefits
If you’re a married couple and can’t afford to postpone receiving your social security benefits, you can use a strategy to help maximize the amount of social security benefits you receive over the long term.
The technique is called the “62/70 Strategy”, and it makes use of the social security spousal benefits.
The spouse who earned less over their lifetime will file for social security benefits at 62 while the higher-earning spouse delays his or her benefits until the age of 70 when the maximum benefit will be received.
The higher-earning spouse’s benefit will continue to grow. If one of you should pass away, the smaller social security benefit will die off as well – leaving the survivor with the higher-paying benefit.
When the higher-earning spouse reaches the age of 70, you drop the social security spousal benefits and start collecting the larger benefit of the higher-earning spouse.
How to Claim Social Security on a Divorced Spouse
While the above scenarios are relevant to married couples and widowers, you may be wondering how spousal benefits work after a divorce has occurred.
Here’s a quick overview.
Do You Qualify for Social Security Benefits Under Your Ex-spouse?
Eligibility requirements for collecting your Ex-spouse’s benefits include the following:
- You must be age 62 or older.
- You must have been lawfully married to your spouse for a minimum of ten years.
- You must be divorced for a minimum of two years.
- You cannot collect if you are remarried.
- Your Social Security benefits must be less than your spouse’s.
- You will collect 50% of your spouse’s entitled benefit.
- If your spouse has remarried you can still collect.
- Even if your ex-spouse is not yet collecting you can still collect the benefit as long as you meet all of the requirements.
What if Your Ex-spouse Is Deceased?
If your ex-husband or wife is no longer living you can still collect on their benefits as long as you meet all of the above-stated requirements with a few minor differences.
The main difference is that you will be entitled to collect 100% of your ex-spouse’s benefit if he/she is deceased. You will also be able to start collecting earlier at age 60.
Mike Piper from ObliviousInvestor.com who writes a ton on Social Security (Ex. Social Security for Married Couples) adds, “But if you do claim at age 60, the amount you receive will be reduced.“
Special Circumstances to Consider
There are some special circumstances that you may need to consider. First, if you have been married and divorced more than once you can choose which ex-spouse you want to collect on.
As long as you meet all requirements on multiple ex-spouses, you will receive your social security benefit based on the highest collector.
Next, if your benefit is higher than your ex-spouse’s benefit you can delay collecting on your Social Security and collect on theirs instead.
This can be very advantageous allowing your benefit to grow and pay out at a higher amount down the road.
Delaying your benefit by just a few years can make a big difference. At any time you can make the switch to collecting on your benefit rather than your ex spouses’.
Everything Else About Social Security for Divorced Spouse
Finally, if you are planning to collect on your ex-spouse’s Social Security benefits here are some other things you will need to know.
- To apply for the benefit, you will need to supply both a marriage license and a divorce decree.
- You can apply online, by phone, or in person at your local Social Security Office.
- If you continue to work while collecting on your spouse’s benefits their earning limits will apply to you.
- If you are collecting a pension the amount of your benefit may be lower.
- Collecting on your ex-spouse’s Social Security will not cost your ex any money or alter what they are entitled to collect.
- If you did remarry but your new marriage has ended either due to your spouse’s death, a divorce or an annulment you are entitled to collect on your ex’s benefits. You can apply and collect benefits any time after your marriage has ended as long as you meet all other requirements.
To get some exact calculations on your social security benefits when divorced, I would suggest that you contact your local Social Security office. That way there’s no question on how much you entitled to.
Need Social Security Assistance?
If you’re having a tough time trying to understand your Social Security benefits, your best resources are to visit www.ssa.gov or call your local Social Security office.
I had an instance where I had a question on Social Security benefits and wasn’t sure who to call.
Knowing nowhere else to turn, I called our local office and got to someone right away. They were able to answer my question immediately – and it was a fairly complicated question.
Kudos to them!
