I conduct a number of seminars to help people better understand their Social Security benefits, and usually I am talking to an audience of married couples or people who have recently lost a spouse and are trying to determine the best strategy for their situation. An area that seems to get lost in the Social Security information shuffle is the benefits divorced individuals may be eligible to receive. Obviously, they qualify for their own benefits, but there are instances where they can also receive additional benefits based on the earnings of the person they are divorced from.
For example, when you are divorced, you are eligible to file for spousal benefits based on your ex-spouse’s work history if you were married at least 10 years and both of you are at least 62 years old. Generally, these “divorced spousal benefits” are 50% of the ex-spouses full retirement benefits, assuming the divorced person filing for them files at their full retirement age.
In addition, if you are divorced less than two years, a person’s ex-spouse must file for their own individual benefits before the divorced spouse can be eligible for spousal benefits. If someone is divorced more than two years, that person’s ex-spouse does not need to file for their own individual benefits for the divorced spouse to be eligible.
One caveat in the divorced spouse benefits qualifications is that remarrying will make someone ineligible for these spousal benefits. Of course, in this scenario, the remarried person would be eligible for spousal benefits based on their new spouses work record. Keep in mind that to qualify for spousal benefits, you would need to be married to the new spouse for at least one year. All of the other usual requirements would remain, such as being at least age 62 in order to file for benefits.
Interestingly, if someone is divorced and doesn’t remarry prior to age 60, they may qualify for survivor benefits if their ex-spouse dies.
Another interesting twist comes in with respect to the “file and suspend” strategy I have mentioned in the past. You might think that this is not an option for a divorced person as there is no spouse to file and suspend with, but that is not the case at all! A married couple can maximize their benefits by taking a spousal benefit only at age 66 and delaying their own retirement benefits until age 70 in order to earn delayed credits. This strategy also works when there is a divorce. When there is a divorce, if the former spouse has reached their Full Retirement Age (generally 66), they can choose to receive their divorced spousal benefit only (50% of ex-spouses benefit) and delay taking their own benefit up until age 70, thus earning delayed credits. This can be a valuable strategy when your own benefit, with delayed credits, would equal more than 50% of your ex-spouses benefit. If the delayed credits would not push you past the level where the benefit was more than 50% of your ex-spouses benefit, then there would be no advantage whatsoever to delaying beyond age 66 to start taking benefits.
When it comes to Social Security benefits, you could spend an entire day wading through information and different scenarios just to determine what would work best for you. But too often, there are situations that seem to slip through the Social Security benefits crack, and the rights of a divorced person to claim their ex-spouses benefits is surely one of the least known areas.