As you approach retirement, you may find that your ideal life no longer includes your current spouse.
You’re not alone. According to the U.S. Census Bureau, the percentage of people who have been divorced is highest among those ages 55 to 64.
Even though you may want to end your marriage, there may be reason to pause those plans.
You may be able to claim Social Security retirement benefits on your ex-spouse’s work record. But the timing of your divorce could impact your eligibility to do so.
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Divorced people have access to former spouses’ benefits only if they’d been married 10 years or longer, according to David Freitag, a financial planning consultant and Social Security expert at MassMutual.
“That is a huge, huge benefit,” he said.
Yet some people are not aware this strategy is available to them. A MassMutual poll conducted last year found that 30% of individuals did not know a divorced person may potentially collect Social Security benefits on their ex-spouse’s earnings history.
Why the 10-year mark is so important
For divorcing couples, taking this Social Security strategy into account can make a big difference.
While giving a presentation on Social Security, Freitag met a woman who had just divorced after she had been married for nine years and six months.
“Had she waited six months, she would have had access to a substantial spousal benefit from her ex-husband,” Freitag said.
Claiming benefits on your ex triggers what is known as a spousal benefit, which is worth a maximum of 50% of their retirement benefit.
In 2022, the maximum monthly Social Security retirement benefit is $3,345 per month for those who retire at full retirement age. The difference between half of that — around $1,672 per month — and zero can be an incentive for some couples to stick it out to 10 years, noted Davon Barrett, a lead advisor and certified financial planner at Francis Financial, a New York-based wealth management firm specializing in divorce planning.
The firm’s clients who are going through a divorce are made aware that they may be able to take their retirement benefit on their own work record or half of their spouse’s, whichever is higher, Barrett said.
“That does provide a little bit of a safety net in some people’s minds,” Barrett said.
Should your ex-spouse die, there may very well be access to a significant benefit for the rest of your life.David Freitagfinancial planning consultant at MassMutual
Importantly, those benefits are also available to same-sex couples, provided they have been married for 10 years or longer, Freitag noted.
If you’re claiming on your ex-spouse and they remarry, you can still claim these benefits.
But you may want to think carefully about getting remarried yourself, which will disqualify you from claiming on your ex’s record. You must also be age 62 or over and entitled to receive either retirement or disability benefits, according to the Social Security Administration.
What happens if your ex dies
If your ex-spouse dies, you may qualify for what’s known as a death benefit, which is worth up to 100% of the monthly checks they received. Again, the 10-year rule for how long you were married also applies.
“Someday in the future, should your ex-spouse die, there may very well be access to a significant benefit for the rest of your life,” Freitag said.
Certain other rules must also be met here, as well. For example, if you remarry after age 60, that will not affect your eligibility for survivor benefits on your ex-spouse’s record.
Notably, if you qualify for these strategies, it’s best to assume that you will have to bring it to the attention of the Social Security Administration.
”When there’s this much money potentially available, I think you have to be your own advocate,” Freitag said.