Understanding the Social Security Rules & Options for Divorced Individuals

Ed Zurndorfer discusses the rules and options available to divorced individuals with respect to claiming the Social Security benefits of a former spouse.

Edward A. Zurndorfer –

From the time Social Security benefits started in 1940, Social Security has maintained that spouses and ex-spouses have a claiming right to retirement benefits. There are tens of millions of individuals who are divorced and approaching retirement but may not realize that they are eligible for Social Security retirement benefits that their ex-spouses earned. This column discusses the rules and options available to divorced individuals with respect to claiming the Social Security benefits of a former spouse. Among the items to be presented include:  (1) Rules to qualify for Social Security benefits as an ex-spouse; (2) determining when it is best to claim benefits and on which record; and (3) factoring Social Security into one’s overall retirement plan.

Basic Rules to Qualify for Social Security Retirement Benefits as an Ex-Spouse

Provided that some basic rules are met, an individual may be eligible to claim a higher Social Security retirement benefit based on an ex-spouse’s Social Security work record. This applies to an ex-wife, an ex-husband, and also to a divorced spouse in a same-sex marriage.

The following are the basic rules to qualify: (1) the individual and his or her ex-spouse must have be married for 10 consecutive years or longer, even if the marriage ended perhaps 30 years later; (2) both the individual and the ex-spouse must be at least age 62 before the individual can claim as an ex-spouse; (3) the individual cannot be remarried although the ex-spouse can remarry; and (4) the individual and ex-spouse must be divorced for at least two years, or the ex-spouse must already be claiming retirement benefits.

If an individual qualifies for a former (ex-) spouse’s Social Security, then the individual would be eligible to receive half of the former spouse’s primary insurance amount (PIA). The PIA is defined as the amount of an individual’s monthly Social Security benefit at his or her full retirement age (FRA). An individual’s FRA depends on when the individual was born. One’s FRA is summarized in the following table:

Full Retirement Age (FRA) by Year of Birth*

If the individual applies for the former spouse’s Social Security retirement benefit but before the individual’s FRA, then the Social Security retirement benefit will be reduced. Note that an application for the former spouse’s Social Security may be done as early as age 62. The reduction for applying for a Social Security benefit at age 62 is anywhere from 25 to 30 percent, depending on one’s FRA. The reduction decreases the closer an individual is to his or her FRA when first applying for the benefit.

There is one catch, however. An individual will only receive a Social Security retirement benefit based on a former spouse’s Social Security earnings record if it is a greater benefit amount compared to the Social Security benefit the individual would receive based on his or her own Social Security earnings record. It is important for a divorced individual who thinks that he or she may qualify for a higher benefit from a former spouse to contact the Social Security Administration (SSA) in order to see which benefit the individual qualifies for.

What Happens in Case of Remarriage?

If an individual was divorced but has since remarried, then the SSA considers the individual as a spouse and not an ex-spouse. The individual’s Social Security retirement benefits will be based on the individual’s current spouse’s work history and not the former spouse’s work history, regardless of whether the current or former spouse has a larger PIA.

However, if the individual’s current marriage ends in divorce or the death of the current spouse, then the individual will be able to claim on whichever benefit is higher; namely, the surviving spouse’s benefit (if the current spouse dies) or an ex- spousal benefit on the previous ex-spouse.

Some Common Misconceptions About Claiming on a Former Spouse’s Social Security Benefits

1. A former spouse has no right to deny or influence an individual’s right to receive a Social Security benefit, assuming the two were married for at least 10 years and have been divorced for at least two years. When an individual is ready to claim a Social Security benefit from a former spouse, the individual simply needs to make an appointment with a local SSA office and bring documents that prove the marriage and divorce.
2. An individual does not need permission from a former spouse to claim on the latter’s Social Security earnings record.
3. There is no limit as to how many individuals can claim on a former spouse’s Social Security earnings record. The only requirement for each of these individuals is that each individual: (1) Had to be married to the former spouse for at least 10 years; (2) has been divorced for at least two years from the former spouse; (3) has not remarried; and (4) the former spouse must be age 62 or older. The former spouse’s own Social Security benefit will not be reduced as a result of these individual(s) all drawing on the former spouse’s Social Security earnings record.
4. Upon the death of the former spouse, all of the individual(s) drawing on the former spouse’s Social Security earnings record will receive the full amount of the former spouse’s Social Security monthly benefits at the time of his or her death. They do not divide up the benefit in equal amounts. This is called an ex-widow or ex-widower Social Security survivor benefit.

When (What Age) Should an Individual Claim on a Former Spouse’s Social Security Record?

With respect to when (what age) an individual should claim on a former spouse’s Social Security record, there is no one age that applies to every individual. Some of the determining factors include: (1) The individual’s health. If the individual is not healthy, then it may make sense to claim it as early as possible; (2) the individual’s need for income in order to pay bills; and (3) whether the individual is younger than FRA and working. If younger than FRA and the individual is working and earning more than the exempt amount ($18,240 during 2020), then the individual could lose some if not all of his or her Social Security benefits.

In general, the longer an individual waits to claim Social Security benefits, the larger the amount of monthly payments the individual will receive, based on their own Social Security earnings record. However, an individual whose claiming Social Security is based on a former spouse’s Social Security earnings record will not get any more than half of the former spouse’s PIA. That assumes that the individual waits to his or her FRA in order to start claiming on the former spouse’s Social Security.

Consider the following example:

Carol and her former husband were married for 17 years, from 1985 to 2002. Carol worked and qualifies for her own Social Security benefit. Now at age 66 (her FRA, she was born on April 1, 1954), Carol is thinking about retirement and wants to know when she could claim (what age), on whose record (her record or her former husband’s), and how much she would receive in monthly benefits under each scenario. The following table summarizes:

If Carol claims half of her spouse’s Social Security, she will initially receive $200 a month more than if she were to claim her own benefit. But if Carol decided to wait to receive her benefit until age 70, she would receive delayed retirement credits of eight percent per year. If Carol starts receiving her benefit at age 70, she will receive $1,320 per month which is $120 per month more than her former spouse’s benefit of $1,200 per month. This is because half of a former spouse’s Social Security benefits are not eligible for delayed retirement credits.

Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street – Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

Social Security and Divorce