- Getting a divorce is a big decision. But you may not know that you should take Social Security benefits into account.
- Provided you were married for at least 10 years, you may be able to claim spousal benefits on your ex-spouse's work record.
- If your ex-spouse dies, you may be able to receive survivor benefits.
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.
It may seem callous, but it might be wise for you to pause those plans to end your marriage — because you may receive significant financial benefit for doing so.
You may be able to claim Social Security retirement benefits on your ex-spouse's work record. But the timing of the divorce itself could be all-important, according to financial planning experts.
The catch is that 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 of this wrinkle. Indeed, 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 couples planning a divorce, the 10-year Social Security rule can make a huge 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-spouse triggers what is known as a spousal benefit, which is worth a maximum of 50% of the 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 incentive enough for some couples in unhappy marriages to stick it out until they reach that 10th year anniversary, said Davon Barrett, a lead advisor and certified financial planner at Francis Financial, a New York-based wealth management firm specializing in divorce planning.
Barrett has advised clients who are going through a divorce that they may be able to take their retirement benefit on their own work record or half of their spouse's, whichever is higher. "That does provide a little bit of a safety net in some people's minds," he said.
Those benefits are also available to same-sex couples, provided they have been married for 10 years or longer, Freitag noted.
What's more, if you're claiming on your ex-spouse and they remarry, you can still claim these benefits.
But if you remarry, it generally disqualifies you from claiming on your living ex-spouse'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.
To be sure, other rules may also apply depending on your personal circumstances. To determine if you qualify, it's best to contact the Social Security Administration.
What happens if your ex-spouse 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 marriage rule applies in this case.
"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.