Creative Alternatives to the Courtroom

Social Security: How Do the New Rules Affect Divorced People?



The Association of Divorce Financial Planners held their annual conference this past October. One of the keynote speakers was Mary Beth Franklin, CFP, who is a contributing editor for Investment News. She spoke about the new Social Security rules and how to maximize benefits. Here is part of her talk relating to divorce:

If married at least 10 years and currently unmarried, you may be able to collect on your ex-spouse’s work record as early as age 62. Your benefits will not affect the amount your ex-spouse or his or her current spouse may receive.

If you have been divorced at least two years, you can collect benefits on your ex even if he or she has not yet claimed as long as you both are at least 62.

Better Strategy for Ex-Spouses

  • Wait until normal retirement age of 66* and file a restricted claim for spousal benefits only.
  • Defer collecting your own retirement benefit until it’s worth the maximum amount at age 70 and then switch.
  • *Must be born by January 1, 1954

Survivor Benefits for Ex-Spouses

  • As long as you were married at least 10 years, you can collect survivor benefits on your ex-spouse—worth up to 100% of the deceased worker’s benefit—even if your ex remarried.
  • Although you lose the right to collect spousal benefits on a living ex if you remarry, you CAN collect survivor benefits on a deceased ex if you wait until 60 or later to remarry.
  • Remember spousal benefits are worth up to 50% of a worker’s PIA; survivor benefits are worth up to 100%. Your ex is worth twice as much dead than alive!

Don’t forget the Kids

  • Minor dependent children under age 18 or permanently disabled adult children may be entitled to dependent benefits when a parent collects retirement benefits or survivor benefits after the parent’s death.
  • Dependent benefits are worth 50% of the parent’s PIA; Survivor benefits are worth 75% of PIA. A spouse* of any age may qualify for spousal benefits when caring for a child under age 16. *Does not apply to divorced spouses.

Family Maximum Benefit Limits

  • There is a limit to how much a family can collect on a worker’s Social Security benefit. The total depends on the worker’s PIA and the number of family members who qualify for benefits.
  • The total varies but generally a family can receive 150% to 180% of a worker’s PIA.
  • If total benefits exceed the family maximum, dependent benefits are reduced proportionately. A worker’s benefit is not affected.
  • If a divorced spouse qualifies for benefits on a worker’s record, it will not be included in the family maximum.

As you can see, going to conferences and meeting other people in your profession can really have an impact on your ability to do a better job in real time. If you are in a profession that has industry gatherings, I encourage you to attend. You might learn some things!