Divorce and Social Security

It isn’t surprising to hear about friends, acquaintances, family members and loved ones divorcing these days.  It certainly seems that everyone knows someone who has recently divorced or is in the process of divorce.   Divorces for those age 50 and older are also on the rise.  The term “gray divorce” has even been coined for those divorcing during their senior years.   Divorce for folks later in life presents many different challenges than for those in their 20s, 30s and 40s.  Financial mistakes during the divorce process for these folks can be more devastating because they do not have as much time to recover from financial blunders.

One critical area to pay attention to during and after a divorce later in life is social security.   If your marriage lasted at least 10 years and you are not currently married, you can receive benefits based on your ex-spouse’s record, even if he or she is remarried.   You can also choose to receive benefits among multiple ex-spouses as long as each marriage lasted at least 10 years.   Filing for benefits on an ex-spouse’s record does not affect his/her social security retirement benefits, and he or she also is not notified that an ex-spouse has filed on his/her record.

To claim on your ex-spouse’s record, you must be at least age 62, not married, and your ex-spouse needs to be eligible to receive his/her own benefit.   If your ex-spouse is eligible for social security retirement benefits, but has not applied, you can receive benefits based on his or her record if you have been divorced for at least two years.

Take a moment to consider your own retirement planning strategies.   If you are divorced, were married for at least 10 years and have reached full retirement age, you could likely apply for divorced spousal social security benefits on your ex-spouse’s record now, and delay your own social security benefits, which will increase your future payments.  If you were born in 1943 or later, the annual rate of increase for delayed social security benefits is 8%!

Divorce is no fun for anyone and in most cases a financial setback.  For additional information on financial planning for divorce, contact me at Budros, Ruhlin & Roe, Inc. at amy.weldele@b-r-r.com.  You may follow me on twitter @BRR_AmyWeldele.

Amy Weldele, CFP®, CDFA®Senior Wealth Manager