Social Security After Divorce

Social Security

Social Security After Divorce

Posted by COTO Insurance & Financial Services
6 years ago | January 17, 2018

Divorce can seem to wreak havoc on many financial plans. However, once the dust has settled and a few years have passed, most of us assume the worst is behind us.

That is indeed true in most cases. However, once you reach retirement age, you might find yourself surprised once again. Your Social Security benefits might not work exactly as you pictured, particularly with regard to spousal benefits. In some cases this is bad news, although in other cases it could be considered good news.

Rule Number One: You must have been married ten years if you want to claim spousal benefits. If you were married less than ten years, you aren’t eligible to claim spousal benefits on your former spouse’s record. This is something to keep in mind if you’re considering a divorce, and you haven’t quite reached that ten-year mark yet.

Rule Number Two: Yes, you can receive spousal benefits even if your former spouse passes away. As long as you were married at least ten years, you can claim spousal benefits even if your former spouse is deceased.

Rule Number Three: Yes, you can claim spousal benefits if your former spouse remarries. However, you cannot claim spousal benefits on their record if you have remarried, unless that marriage ends.

Rule Number Four: Spousal benefits are based upon your former spouse’s earnings record. Social Security uses an individual’s highest-earning 35 years to calculate their benefit amount. Naturally, due to various events that can happen, any of us could end up with a significantly different benefit amount than we originally expected. But when you’re depending upon your former spouse’s earnings record, this does throw a bit of a wild card into the mix.

As you can see, divorce complicates Social Security planning a bit, and therefore can complicate financial planning. This is particularly true for lower-earning spouses, who find themselves divorced later in life without much time to work and boost their own earnings record. If you’re concerned about your financial plan for retirement, give us a call. We can help you comb through these complex rules, and make a plan that works for you.

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