For many people, Social Security benefits are an essential source of income following retirement. This is true regardless of whether you’re married, single, widowed, or divorced. As with any legal matter, the law surrounding Social Security benefits can be complicated – and this complexity is often heightened when divorce is a factor. As a result, Social Security retirement benefits can be a difficult issue to address during divorce settlement negotiations.
While this is true, the fact of the matter is that Social Security benefits often play a critical role in a retirement income plan. These benefits can make a significant difference in cash flow and financial security after retirement. As a result, it is essential to understand the basics of the law surrounding Social Security retirement benefits, and how you may want to address the issue as part of the divorce process.
What Are Social Security Retirement Benefits – And Who Qualifies?
As most people know, Social Security is a program run by the United States government, specifically, the Social Security Administration. Many employed individuals regularly pay taxes to the Social Security Administration from their salary. Those funds are then redistributed to qualifying individuals for a variety of reasons – including retirement.
To qualify to receive Social Security retirement benefits, an individual must be at least age 62 or older and must have worked a qualifying job for a sufficient length of time through which he or she paid taxes into the Social Security system. While individuals can begin to collect benefits at age 62, waiting until “full retirement age” (FRA, for short) is often advised.
When an individual has reached FRA, he or she can claim their full retirement benefit amount. For those individuals born between 1943 and 1954, FRA is 66. It rises by two months every year thereafter until it reaches 57 for those born in 1960 or later. Sometimes, individuals who do not meet these criteria can still qualify to receive benefits. Examples include being a spouse, ex-spouse, or dependent of an individual who qualifies for benefits.
A Brief Look at the History of Social Security Retirement Benefits
As part of attempting to understand the law surrounding Social Security benefits, it can also be helpful to understand a bit about the history of those benefits. At the time the Social Security Act was initially passed in 1935, it provided benefits for insured workers – but not for their spouses. As a result, at that time, many women who did not work outside the home simply did not qualify for Social Security benefits of any kind. Fortunately, this didn’t last for very long, and in 1939, a series of amendments were enacted which extended Social Security benefits to spouses and children. As a result, wives could receive a portion of their husband’s retirement benefits for the first time.
As time passed, the law continued to expand and evolve. Additional reforms eventually extended Social Security retirement benefits to divorced wives, in cases where the marriage had lasted longer than twenty years. In the 1970s, the law was expanded even further, as the word “wife” was changed to “spouse,” which also allowed husbands to collect retirement benefits from ex-wives. The required length of time for the marriage was also eventually reduced from twenty years to ten, to qualify for benefits.
While it is fortunate that the law has continued to evolve, it is easy to see how the rules can become confusing, particularly if an individual has been married more than once, or has had a spouse pass away, for example. Let’s take a look at some commonly asked questions surrounding divorce and Social Security retirement benefits.
A Closer Look at Commonly Asked Questions
- How much will I receive? As the law currently stands, if a divorced spouse claims his or her Social Security retirement benefits at full retirement age or later, he or she will qualify to receive 50% of their ex-spouse’s primary insurance amount (also known as “PIA”), as long as the spouse seeking the benefits did not remarry before turning 60 years old, and provided that their benefits are less than 50% of their ex-spouse’s. By way of example, assume that Sam and Sharon are divorced, and both are of retirement age. Sam’s PIA is $2,000 per month. Sharon does not qualify for retirement benefits on her own. If Sharon did not remarry before turning 60, and if Sam and Sharon were married for at least ten years, Sharon would be entitled to 50% of Sam’s PIA, or $1,000. It is important to remember, however, that if Sharon received her own Social Security retirement benefit that was more than $1,000 (or 50% of Sam’s), she would only receive her own benefits and not any divorce benefits from Sam.
- What if there is an age difference between two spouses? In many marriages, there is an age difference between spouses. Often, people wonder how that age difference might affect the ability to receive retirement benefits. The good news is that one spouse’s decision in this regard doesn’t affect the other. If one spouse claims before retirement age, thereby lowering his or her share of benefits, this ultimately won’t affect the ex-spouse. If the ex-spouse waits to claim benefits at full retirement age, he or she will receive the maximum benefit to which they may be entitled, regardless of the timing of the other spouse’s claim.
- What if an individual had more than one ten-year marriage? As with so many legal matters, there are any number of life circumstances that can add additional complications and questions to the issue of Social Security benefits after divorce. What if, for example, an individual has two or more marriages that lasted ten years or longer? In that case, typically, the divorced individual will receive the higher of the two divorced-spouse benefits, provided they meet other qualifications. Receiving benefits from both ex-spouses, however, is not allowed. In any case, regardless of which ex-spouse’s benefits are chosen, that spouse will not have his or her benefits decreased on that basis.
- Will Social Security notify my ex-spouse that I’m collecting benefits based on his or her work record? Many divorced individuals are glad to hear that the answer to this question is “no”. Your ex-spouse will not be notified, and in fact, doesn’t even have to be claiming his or her own retirement benefits yet for you to begin receiving your share – as long as you have been divorced for at least two years prior to the time that you make a claim for benefits.
- Can I still collect benefits if my ex-spouse passes away? Even if your ex-spouse passes away, you can still collect your share of benefits. This is true as long as you meet other qualifying conditions – namely, that your marriage lasted for at least ten years, you did not remarry before the age of 60, and you are an appropriate age to receive the benefits. If you are not of full retirement age, you may still collect survivor’s benefits from your late ex-spouse, although the amount you ultimately receive may be reduced. Talking to a lawyer about your particular circumstances is always advised.
These are only a few commonly asked questions of many. As with so many matters that couples confront during and after divorce, there may be many more questions you have that are specific to your particular situation and your unique circumstances. For those reasons and many others, having a knowledgeable and experienced divorce attorney on your side who can guide you through the process and ensure that your rights are fully protected is essential. At The Law Office of Dustin McCrary, we’re here for you.
DUSTIN MCCRARY – YOUR NORTH CAROLINA DIVORCE ATTORNEY
Like most legal matters, divorce can be complicated. Social Security benefits are only one of many issues that couples must address as they navigate this difficult process. On any difficult journey, you need a knowledgeable and experienced guide – one who can provide you with the advice, support, and direction you need. At The Law Office of Dustin McCrary, we’re here to do exactly that. Divorce is all we do – and we are proud of our reputation of providing every client with nothing less than the excellent representation they deserve. If you’re ready to get started, give us a call. We look forward to speaking with you soon.