Since Social Security benefits are often a substantial part of your cash flow during retirement, it’s important to understand how they can be impacted by marriage and divorce. Every relationship and financial situation is different, so it’s wise to be prepared to make well-informed decisions about your benefits.
- How does marriage affect Social Security retirement benefits?
Marriage doesn’t impact your Social Security retirement benefit because it’s based on your own personal work record and earning history. You and your spouse each collect your own benefits, as long as you’ve earned your 40 credits, which is typically equivalent to about a decade in the workforce. More credits do not affect your benefit amount and credits don’t need to be accrued consecutively to count, as they’re only used for qualification purposes. Your retirement benefit amount is determined by a percentage of your average indexed monthly earnings based on the 35 years when you made the most money.
There isn’t a penalty for being married nor a limit to the benefits paid to a married couple, assuming that both have worked outside the home and earned their own credits. However, if one spouse has been stay-at-home, then they are limited to an amount equal to 50% of their working spouse’s retirement benefit. This is where the maximum family benefit comes into play as there is a cap on the total amount a family can collect from Social Security on one worker’s earning record. In this cap, Social Security considers spousal, children, and survivor benefits; the maximum amount is calculated by a formula that results in 150%-188% of the worker’s monthly benefit payment at full retirement age (which is between 66 or 67 depending on year of birth).
- How does divorce affect Social Security retirement benefits?
Considering the timing and circumstances of your divorce, you could be eligible for the spousal benefit, which is worth an amount of up to 50% of your ex-spouse’s retirement benefit. If you are divorced after being married for at least 10 years, you may be eligible to claim benefits on your ex-spouse’s work record. There are a few additional requirements: you can’t be remarried, you need to be age 62 or older, your ex-spouse needs to be 62 or older, and the benefit that you’re entitled to receive from your own work record must be less than the benefit you’ll receive from your ex-spouse’s record.
If your situation meets these qualifications, you’re eligible to receive benefits after you have been divorced for at least two years. If you will receive more benefits from your ex-spouse than your own earning record would provide you on its own, Social Security will pay your benefit first, and then you will receive a supplemental amount to make the combination of benefits equal to the higher amount.
- Does my ex-spouse know if I take benefits? Does it affect their benefits?
You can claim the spousal benefit without going through your ex for assistance, but it’s a bit more complicated than accessing your own record. You’ll need to contact a Social Security office to provide your marriage certificate and divorce decree, then you’ll either need your ex-spouse’s Social Security Number or their date of birth, place of birth, and parents’ names.
Although the Social Security Administration (SSA) won’t notify your ex if you claim the spousal benefit, your ex can find out by asking Social Security themselves. SSA is permitted to tell your ex the name of any auxiliary beneficiaries that are drawing or have drawn benefits on their earnings record. SSA can also disclose when you became entitled to the spousal benefits, the benefit amount you have a right to collect, and whether the benefit has ended or not. SSA may not reveal your current address, the actual amount you’re receiving (as it could differ from the benefit you’re entitled to), retroactive benefits, nor the name of a representative payee that’s overseeing your benefits (in the event you were unable to do so on your own due to a disability or illness).
Your ex will not be affected by you claiming spousal benefits and will receive the full amount that they’re permitted to and won’t have their benefit decreased in any way. Additionally, your spousal benefit will not affect their current spouse, children, nor maximum family benefit.
- Does the age I take benefits affect payments?
Yes. Although you can claim benefits as early as age 62, you will receive a reduced amount unless you wait to claim them at full retirement age. For example, if your full retirement age is 67 and you claim spousal benefits at 62, you would receive a benefit that is equivalent to 32.5% of your ex-spouse’s full benefit amount. This applies even if you file for spousal benefits early and find out that you’re not eligible yet because your ex has not begun receiving their retirement benefit. If you wait until your full retirement age, you will receive the maximum amount you’re eligible for, which is equal to 50% of your ex-spouse’s retirement benefit. There is no reason to delay claiming spousal benefits beyond your full retirement age because the maximum amount you can receive is 50%.
With all of this information in mind, consider your own unique circumstances and how you can best ensure that you receive the Social Security retirement benefits you’re entitled to. Perhaps you’re married and plan to receive your own benefits, or you’re divorced after a long marriage and are wondering if your spousal benefit could be higher than your personal benefit amount. On the other hand, if you worked in the home while your spouse was employed outside of the home, you’ll want to look into claiming benefits on your spouse’s earning record. If you aren’t sure how to proceed or have questions, there are many resources available to help you through the process. The Social Security Administration has FAQs and more specific information on their website, as well as agents available via phone and email. You can also reach out to professionals like a CERTIFIED FINANCIAL PLANNER™ or CPA for guidance on navigating the system.