Divorce and Social Security: 5 Things to Know

If you're divorced and looking toward retirement, you may want to know about an alternate strategy for claiming Social Security benefits.

Sometimes called "ex-spouse benefits" or "Social Security divorce benefits," this route could help some divorced spouses get a higher payout, if they're able to file for Social Security based on their ex's lifetime earnings history.

The thing is — as with everything pertaining to Social Security — there are many different factors you have to consider.

Luckily, we have them all neatly unpacked for you, right here.

Here's how Social Security divorce benefits work:

If you're at least 62 and divorced, and you were married for 10 years or more, you may be eligible to receive Social Security benefits based on your ex-spouse's earnings history, assuming they qualify for benefits themselves.

However, this strategy isn't an option for everyone who's divorced. Here are three key factors to weigh before you read further:

• Are you remarried? If you are, you can't claim based on your ex's record — unless that subsequent marriage has also ended (owing to death, divorce, or annulment).

• As you may know, Social Security benefits are based on each person's lifetime earnings history. If your ex consistently earned more than you did, this strategy might work. But if you are or were the higher earner, it won't. Because…

• Similar to spousal benefits, you can only receive up to 50% of your ex-spouse's benefit amount. So the question comes down to: Is half of your ex-spouse's benefit likely to be higher than the full amount you would get on your own?

Speaking hypothetically: If your benefit amount (based on your own earnings record) is $1,100 per month, and your ex's is $1,800, the maximum divorce benefit you could get would be $900, which is 50% of $1,800.

Since $900 is lower than your own benefit of $1,100, you wouldn't qualify for the divorce benefit, and Social Security would automatically pay the higher amount.

However, let's say your Social Security benefit is only $700 per month in this example. By filing for divorce benefits, you could get $900 per month rather than $700 — a real boon.

If you're on good terms with your ex, you can ask them what they're getting each month from Social Security, then do the math.

If you're not on good terms, you may have to file with Social Security as a divorced spouse in order to learn whether you'll receive a payout based on your earnings record or your ex's. You won't get both amounts, but Social Security would pay the higher benefit.

Since that's a lot to ponder, and you may need to call a friend before we continue (I would), let me take this interval to tell you some great news.

Filing on your ex's earnings record is a you thing, not a them thing — so your ex isn't involved or affected. If you file as a divorced spouse and end up getting a bigger Social Security check, it's not like your ex gets less. Nothing happens! They get the same amount!

I know. Somewhere in the Social Security Administration back in the 1930s when spousal benefits were established, there was a sane person making the rules.

OK, you've got the fundamentals. Now we have to dig into some details so you can gauge whether this strategy is plausible for you, given your unique situation. First, be sure you understand some of the basic principles about when to file for benefits.

• Your age matters. To get the maximum divorce benefit, you must be of the full retirement age when you file. Full retirement age (or FRA) is age 66 if you’re born between 1943 and 1954. It increases gradually to age 67 for those born between 1955 and 1960. For anyone born after 1960, full retirement age remains 67 for now.
  
  That means, if you file before you've reached full retirement age, you'll get a permanently reduced amount. The same principle applies when you file for regular Social Security benefits: waiting longer will result in higher monthly benefits.
  
  However, with divorce benefits, the amount you can receive maxes out once you reach your full retirement age. You don't get a bigger payout if you wait until age 70, as you would with regular benefits.

• Your ex doesn’t matter as much as you’d think. What’s interesting about Social Security divorce benefits is how and when your ex does, and doesn’t, come into the picture.
  
  For example: You can file for Social Security as a divorced spouse even if:
  
  —Your ex is remarried.
  
  —Your ex is remarried, retired and collecting Social Security.
  
  —Your ex is deceased (you may still qualify for divorced widow or widower benefits).
  
  —Your ex is not retired or getting Social Security themselves.

In that last case, though, your ex does have to qualify for Social Security or disability — and you have to be divorced for at least two years before you file on their record.

Let's say you've ticked all the boxes so far. You have run the numbers, and you are going to go for it. You believe you are going to get a bigger Social Security payout thanks to your ex, and lawyers don't even have to get involved.

While the results will be worth it, you do have to invest some time and effort. You need to answer some questions. You need to find some documents (your marriage certificate and your divorce decree). You may need originals of some of those documents.

Read this list of instructions on the Social Security website after you have poured a calming beverage for yourself.

The bottom line is that if you're at least age 62, were married for 10 years or more before you divorced, and you file for Social Security on your ex's record, you may be eligible for up to half of their benefit amount — assuming that's greater than your own. Either way, when you file, you'll automatically get the higher amount, and either way your ex doesn't have to get involved.

Just be sure to do your due diligence; consult a professional if you need to. While certified financial planners are helpful in many areas, they may not know the finer details of Social Security. For that, you might want to consider a Registered Social Security Analyst. Some points are not covered here — about working while receiving benefits, for example, or what happens if you have a pension from your employer — that may apply to you.

M.P. Dunleavey writes about life and money, as she has for many years, in countless publications (and a book). She lives in New York City with her family and two cats. Read More