Divorce brings with it many challenges. Some of these challenges may be more immediate. How often are you going to be able to see your children after the divorce? Where are you going to live? Are you going to be able to stay in your family home? Who gets what and how much of it is so often what a divorce comes down to. The immediate concerns of your life are what takes precedence when you analyze something as important as divorce.
A question that I hardly ever receive from a client or potential client of the Law Office of Bryan Fagan is the impact of a divorce on their social security benefits. This issue may be relevant to them, but they don’t know enough about the subject to be thinking critically about it. In today’s blog post from the Law Office of Bryan Fagan, I would like to look at this question a little closer. Specifically, if you have been the spouse who has earned most of the income for your family over the years, will your spouse be able to take advantage of your social security benefits when it comes time for her to retire?
What do you need to know about social security benefits and divorce in Texas?
Even though there are more women in the workforce nowadays than there are men, you may be in a position to be able to receive more social security benefits if you were going off of your ex-spouse’s work history than your own. The Social Security Administration will do the math for you on this, and you would be able to take advantage of whichever amount is more significant.
A divorced spouse must meet specific standards to take advantage of their ex-spouse’s earnings history related to social security benefits. First and foremost, your marriage must have lasted for longer than ten years. It doesn’t matter if you meet every other benchmark that I am about to list- if you don’t meet this one, you cannot receive social security benefits based on your ex-spouse’s income.
The other one that tends to get people is that you cannot have remarried after your divorce. The event that you are remarried you cannot also take advantage of a past spouse’s earnings history when it comes to applying for your social security benefits. This would be like having your cake and eating it, too. However, if your subsequent marriage were to end by divorce or death, then you could go back to your initial wedding and take advantage of their work history when you start to apply for benefits.
Something that many people are not aware of is that if you do remarry, you could take advantage of either spouse’s earnings history if your second spouse passes away. Here is how that would work: as long as your first marriage lasted at least ten years (as previously discussed) and your second marriage lasted at least nine months before their death, you should not have any issue with being able to claim benefits under either spouse’s work/earnings history.
Another critical benchmark that you have to meet is being at least 62 when you apply for benefits. As a surviving divorced spouse, you may claim benefits as early as age 60 if your spouse is deceased. Finally, if your ex-spouse is dead and disabled, you may also apply for help when you turn 50.
Do you have to hold off on applying for benefits until your spouse begins to receive benefits?
This is a logical question to ask. Suppose your ex-spouse is younger than you or is otherwise engaged in a career where he does not appear to be slowing down anytime soon. In that case, you may be concerned that you will have to hold off on applying for benefits until he retires and uses to receive social security retirement benefits. However, you should be aware that as long as you and your ex-spouse have been divorced for two or more years and if he is 62 or old, you may apply for and receive benefits under his earnings history.
Do you get the number of benefits as your ex-spouse when you apply under his earnings history?
You would be eligible to receive half of your ex-spouse’s retirement benefits if you apply for benefits based on his earnings history. If your ex-spouse passes away before you do, then you would be able to receive his whole portion of retirement benefits. Your benefit amount would be based on the value of the benefits upon his full retirement age. Your amount of help would be reduced if you apply before your full retirement age, as well.
What happens if your ex-spouse has remarried? Does that prevent you from receiving benefits?
In the years since you and your spouse got a divorce, he has since remarried. When you heard about this, you were concerned because you thought that your ability to receive social security benefits based on your ex-spouse’s work history would be negated now that your ex-spouse has married someone. However, you can rest easy knowing that your benefits will not be impacted.
Your applying for benefits under your ex-spouse’s income history will also not be made known to your ex-spouse or their new spouse. This is probably for the best, considering the number of vindictive ex-spouses that would go to great lengths to do things that could potentially harm a person’s ability to collect benefits that are rightfully theirs under the law.
What about collecting benefits for your deceased ex-spouse’s children?
Here is a situation that does not come up that frequently (thankfully) but may be relevant in your position. Suppose that you have divorced your ex-spouse, but you are raising his children (all below 18). You may be concerned about your ability to raise the kids on your own were he to pass away. They can receive benefits based on your ex-spouse’s work record when they are under 18.
Can you flip flop between receiving benefits based on your ex-spouse’s work history and then off of your own?
If you were born before January 2, 1954, then you can collect benefits based on your ex-spouse’s work record while you allow your help to grow. Once you reach age 70, you can then flip to receive benefits based on your work history. Suppose you were born after this date, and you apply for social security benefits at any age. In that case, the Social Security Administration will give you whichever gift provides you with more money every month.
Do you have to be retired from working to receive social security benefits?
The quick answer to this question is that you can work and receive social security benefits simultaneously. If you are under the age of 66 or 67 (whatever your specific full retirement age may be) and you make more than the earnings limit to receive benefits (approximately $18,000 per year), then you will receive a reduced amount).
What about Medicare?
Social Security benefits, as we have just spent some time covering, depend upon your or your ex-spouse’s earnings history as far as how much money you receive. On the other hand, Medicare benefits depend on no external factors as they are the same for everyone across the board. Suppose you do not have an earnings history sufficient to provide you with coverage under Medicare. In that case, you will need to have been married for at least ten consecutive years before your divorce to have Medicare coverage based on your ex-spouse’s work history.
Concerns as you head into your divorce
Unfortunately, divorce can set you and your family back financially if you cannot go through the process. If you are an older individual (65+), then you have a particular set of circumstances to concern yourself with that younger persons do not have to worry about for the most part.
We can start with the obvious, a younger person going through a divorce has more time on their side to recover from the divorce process than do you as an older divorcee. Your divorce doesn’t have to be expensive, but it can be. On top of having to pay an attorney to represent you in a case, your community estate may be divided in such a way that a great deal of your wealth is shifted to your ex-spouse. If you are nearing retirement age, likely, you do not have much longer to try and make up for the property that has been shifted to your spouse. Financial insecurity is not something you want to deal with as you head into your golden years.
What about your overall retirement picture?
We have been talking about Social Security benefits for this entire blog post, but have you considered the rest of your retirement plan as you work your way through a divorce? If you and your spouse are both nearing retirement years, you need to be aware that the decisions you make about your retirement benefits can impact your life for years to come. For instance, choosing to split your retirement benefits 50/50 between you and your spouse may seem like the equitable thing to do, but doing so may mean that neither of you has sufficient money in the reserve to retire comfortably.
If you have already retired and are getting a divorce, doing so may mean that you have to go back to work to dig yourself out of the financial hole that you have searched. Leaving your spouse may not only mean that you have to go back to work, but it could also mean that you are going to lose the health insurance benefits that you had earned through your spouse’s employer. The older you are, the more difficult it can be to catch on with a new insurance provider. Even if you can get on with a different provider, the cost may be prohibitive to your doing so.
What should you do with life insurance?
If you are reading this blog with any degree of interest, you may wonder whether or not life insurance is something you should be looking into. Some of us may have had policies purchased for us when we were very young. These whole life policies are looked at as an investment in many situations, as the policy's cash value grows over the years. The question is whether or not life insurance is something you need.
The long and short of it is that you do not need life insurance unless another person (dependent) relies on your income to live. If you have no children under 18 to support after the divorce, all you need to have in reserve is a necessary amount of money to bury you if you were to pass away. Otherwise, without anyone relying on your income, you should not need life insurance. Contact your financial planner to discuss this issue with them and to assess your specific circumstances.
Questions about Social Security benefits in divorce? Contact the Law Office of Bryan Fagan
If you have any questions about Social Security benefits or any of the information contained in Today's blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free of charge consultations six days a week where we can answer your questions and provide you with specific feedback about your case. It is an honor to serve the families of southeast Texas as we do in courthouses across our region. I appreciate your interest in this topic and our law practice.