4 Essential Retirement Benefit Rules for Divorcees

Essential Retirement Benefit Rules for Divorcees

If you've got an ex-husband or ex-wife, there are some important rules you need to know about Social Security. Rules that affect your benefits and how you claim them.

It doesn't matter if you're on good terms with your ex-partner, can't be in the same room without a fight, or simply haven't seen each other in years. Or even if you're simply considering divorce. You need to know these rules.

Rule #1: Divorcee Benefits are a Subset of Spouse Benefits

If married, we can collect 50% of our spouse's Full Retirement Age, or FRA (an age between 66 and 67, depending on our birth year) benefit once we reach our own Full Retirement Age. (If our own work-based benefit will be greater, then we will receive that amount instead and the spouse rules will not apply to us.)

In order to claim the spouse benefit, our spouse must have started to collect their benefit already (not so for divorcees: our ex-spouse just needs to be at least 62, whether or not they started their claim yet). If we claim the spouse benefit before FRA, then it is reduced for each month prior to this age that we claim.

Rule #2: Divorcees Qualify for Survivor Benefits, Same as a Spouse

The general survivor rule is so little understood by the public: When the first spouse in a marriage passes away, the survivor receives an amount equal to the higher of the two benefits thereafter (assuming the surviving spouse is at Full Retirement Age); the lower of the two benefits goes away.

While a few couples have comparable benefit amounts because of similar work histories, the vast majority have substantial differences, so the switch to the maximum benefit when the first spouse passes can be critical to the financial security of the survivor (assuming the survivor had the lower benefit).

If we qualify for a spouse benefit under the divorcee rules, then we also qualify for a full survivor benefit—so long as we have not remarried before age 60. However, receipt of the benefit may not be automatic…

For instance, suppose an ex-spouse passes away at FRA prior to ever starting their own benefit. At that age they would be eligible for the Full Retirement Age benefit which would also establish the survivor benefit: This amount is commonly much greater than any amount the surviving ex-spouse could ever receive on their own record.

Yet there may be no record at the Social Security Administration (SSA) to formally link the deceased's account with the surviving ex-spouse because the deceased had not started to collect yet. Further, if we are estranged from the ex-spouse and fail to hear about the death, no benefit may be paid and it can be left on the table and lost.

Rule #3: The 10-Year Rule

Divorce often happens long before we are approaching 62 and starting to think about our Social Security benefits. Consequently, many are unaware of this rule—or at least they were unaware at the time of divorce.

Here's what they wish they knew: We only qualify for spouse and survivor benefits through divorce if the marriage lasted at least 10 years; to receive such a spouse benefit we cannot be remarried while, for the survivor benefit, we can be remarried but only after age 60 as I said above. A day short and we don't qualify. (A couple that married, divorced, remarried, and divorced again can qualify if the combined time in marriage adds up to 10 years.)

I have met a number of divorcees who only found out years later that being unaware of this rule blocked them from any benefits.

Remember, the time-in-marriage includes any period of separation—we don't have to act married!

In sum, if anywhere close to 10 years, wait to let that divorce be finalized. If that is a problem for the other spouse, that becomes a negotiating point for the divorce lawyer: In other words, your spouse would have to buy you out of your prospective benefits, which could easily add up to hundreds of thousands of dollars in a normal life expectancy, even before considering survivor benefits.

Rule #4: Divorcee Benefits Don't Reduce Anyone Else's Benefit

Many believe that if an ex-spouse claims against their former spouse, the total spouse benefit must then be divided between beneficiaries. On the contrary, the number of potential spouse claimants is only limited by the number of 10-year ex-marriages that the primary spouse had—plus any current spouse. They can all get the full claim at their Full Retirement Age.

Moreover, they would each qualify for the full survivor benefit if the primary spouse pre-deceases them, without limitation.

Perhaps most comforting, unless we bring it to the attention of an ex-spouse that we are collecting on their account, they will never be told about it, at least not by the SSA. SSA will discretely and confidentially investigate as necessary to determine that the former marriage lasted 10 years: Only the divorcee will know once they receive the determination that their claim is recognized.

Divorce is a difficult period in anyone's life. Understanding our possible rights as an ex-spouse should not get lost despite the challenge of this transition.

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