SIX STEPS Widowed or Divorced Baby Boomers Ought to Know to Maximize Their Income from Social Security

Editor’s note: This is the first part of a 2-part column series provided by Artie Bernaducci. 

Although most people know that Social Security can be a key component of retirement income, many do not realize that the income doesn’t necessarily have to be based on their work record.

For instance, there are four different categories of Social Security benefits. These include retirement, disability, dependents, and survivors’ benefits. In addition, within these categories, there are “sub-categories,” too. 

For example, an individual can collect Social Security retirement income based on their work record. A worker’s spouse can also claim spousal retirement benefits from Social Security – even if the spouse never worked. 

If a couple divorces, it may also be possible for someone to collect Social Security retirement income benefits, based on their ex-spouse’s work history, provided that the ex-spouse who is filing is not re-married. 

The same is true about Social Security benefits for widows and widowers. So even if you have now found yourself “suddenly single,” you could still be eligible for an ongoing and reliable retirement income stream from Social Security. 

How Divorce or Death of a Spouse Can Affect Your Social Security Benefits

It’s no secret that several marriages end in divorce every year. In fact, over the past several years, couples over the age of 50, in particular, are experiencing high rates of divorce, with roughly 25% of marriages ending. This figure is substantially higher than the 8% divorce rate for those over age 50 in 1990. 

If you fall into this category, it is more likely that you and your ex-spouse may have children who are grown, which can eliminate a child custody battle. However, it does bring up other important questions, such as how – and how much – each of you will receive in retirement income from Social Security. 

This is particularly the case if you were a stay-at-home spouse with little (or no) income from employment. In this instance, you may be entitled to Social Security’s divorced spouse’s benefits. 

Individuals who are widowed may also be eligible to receive widows/widowers benefits through Social Security. Widows and widowers can receive reduced benefits early at age 60 or full benefits at their full retirement age. 

A widow(er) may also receive Social Security benefits as early as age 50, provided that they are disabled, and their disability started either before or within seven years of the primary worker’s death. 

Further, benefits may be received from Social Security by a qualifying widow or widower at any age, if the survivor has not remarried, and if they take care of the deceased worker’s child who is under the age of 16 or is disabled and receives benefits based on the worker’s record. If a widow or widower remarries after reaching age 60 (or after the age of 50 if disabled), the remarriage will not impact their eligibility for Social Security survivor’s benefits. 

What is the Amount of a Divorced Spouse’s Social Security Benefit?

As a qualifying divorced spouse, the benefit you can receive from Social Security is equal to one-half of your ex-spouse’s full retirement (or disability) benefit if you start receiving benefits at your full retirement age. If you begin receiving these benefits before your full retirement age, the dollar amount will be reduced. 

While the full retirement age (FRA) for Social Security retirement benefits used to be 65, it is now based upon the year and month of your birth, and it can range anywhere from age 65 to age 67.

Age to Receive Full Social Security Retirement Benefits

Source: Social Security Administration

It is important to note that the Social Security divorced spouse’s benefits do not include any delayed retirement credits that your ex-spouse may receive on their retirement income benefit. 

Delayed retirement credits can increase a retiree’s benefit amount by 8% per year between full retirement age and the time that benefits begin (up to age 70). So, for example, if your full retirement age is 66, and the amount of your monthly benefit from Social Security is initially $2,000, you could delay the start of your benefit and get an 8% “raise” each year that you wait (again, up to age 70).

Here is an example of how much your monthly Social Security retirement income benefit could increase – and this doesn’t even include an annual cost of living adjustments (COLA) from Social Security. 

Social Security Delayed Retirement Credits

With that in mind, it is important to compare how much benefit you may receive on your work record (if applicable) versus taking the Social Security divorced spouse’s benefit based on your ex’s work record. 

What is the Amount of a Widow/Widower’s Benefit from Social Security?

The amount that a surviving spouse may collect from Social Security can depend on several factors, such as:

• The age of the widow or widower
• The age of the spouse who passed away
• The deceased spouse’s benefit amount at their full retirement age
• Whether or not the spouse who passed away had already begun collecting Social Security benefits

In addition to monthly widow/widower’s benefits, a one-time payment of $255 can also be paid to a surviving spouse if he or she had been living with the deceased worker or if they were living apart. Still, the survivor was receiving certain Social Security benefits based on the deceased worker’s record. 

Who is Eligible for Social Security Divorced Spouse’s Benefits?

Even though you are no longer married to your ex, you may or may not necessarily be eligible for Social Security benefits based on their work record if you are now divorced.

There are several criteria that you need to meet, including:

• Your marriage lasted at least ten years
• You are currently unmarried
• You are age 62 or older
• Your ex-spouse is entitled to Social Security retirement or disability benefits (although they do not have to be receiving their benefits yet), and
• The benefit you are entitled to receive (based on your work record) is less than the benefit you would receive based on your ex-spouse’s work.

If you remarry, you generally will not be allowed to collect Social Security divorced spouse’s benefits on your former spouse’s record – unless your later remarriage also ends (either by death, divorce, or annulment). 

It is also important to note that if your ex-spouse has not yet applied for retirement benefits through Social Security, but they can qualify for them, you can receive benefits on their record if you have been divorced for at least two years. 

Like with your retirement benefits from Social Security, if you continue to work while receiving a divorced spouse’s benefits, the retirement benefit earnings limit will still apply. 

For example, suppose you are under your full retirement age for the entire year you collect benefits. In that case, Social Security will deduct $1 from your benefit for every $2 that you earn above the annual limit. (In 2019, this limit is $17,640).

In the year that you reach your full retirement age, Social Security will deduct $1 in benefits for every $3 you earn above $46,920 (in 2019). In this case, Social Security will only count earnings before the month you reach your full retirement age. 

Then, beginning with the month that you reach your full retirement age, your earnings will no longer reduce your Social Security retirement income benefits – regardless of how much you earn. 

If you start receiving Social Security divorced spouse’s benefits, it will not impact the amount that your ex-spouse receives when they start collecting. Nor will it affect the amount of your ex’s new spouse (if applicable) and how much they could receive.

Let’s take a look at an example. Sarah and Jim were married for 15 years, and then they got divorced. Sarah is eligible for Social Security divorced spouse’s benefits at age 62, provided that she does not remarry (unless that marriage also ends). 

Jim does get remarried to a woman named Stephanie. They have four children together. When Jim becomes eligible to collect his Social Security retirement benefits, the amount that Sarah collects will not reduce the amount that Jim or Stephanie can receive when they file for Social Security. 

Sources

Hymowitz, C. (2016, September 29). Older Americans are Jeopardizing Their Retirement with Divorce. Bloomberg Businessweek. http://www.bloomberg.com/news/articles/2016-09-29/it-is-not-just-brangelina-taking-a-financial-hit-with-late-divorce 

Benefits Planner: Retirement. If You Are Divorced. Social Security Administration. https://ssa.gov/planners/retire/divspouse.html

Form SSA-2 / Information You Need to Apply for Spouse’s or Divorced Spouse’s Benefits. Social Security Administration. https://ssa.gov/forms/ssa-2.html

Retirement Benefits. Securing today and tomorrow. Social Security Administration. 2019. https://ssa.gov.pubs/EN-05-10035.pdf

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