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The Impact of Divorce on Social Security Retirement Benefits
There are enough issues to worry about in a divorce without thinking about Social Security. Unfortunately, a divorce could affect the benefits that you will receive. There are two basic types of Social Security benefits, retirement and survivor benefits. Here, we will look at the impact of divorce on retirement benefits.
Retirement benefits are monthly payments that a worker and their spouse can receive when the worker has contributed to the social security system and the worker has become entitled (meaning they are at least 62 years old or fall under an exception) to the benefit. In this article, we will focus on what benefits, if any, a spouse or former spouse is eligible to receive.
The easiest way to understand how a divorce can impact this benefit is to start by looking at how the scheme works for spouses in general, and then to see how divorce can affect the benefit.
Retirement Benefits in General
Whether you will receive retirement benefits based on the earnings of your spouse will be determined by a number of factors.
If you have worked and have your own Social Security account then the monthly retirement benefits that you have earned could exceed the amount of benefit that you could receive through your spouse. In that case, you would apply for both benefits but Social Security will only pay you an amount that is equal to whichever benefit is higher. If the benefit you get through your spouse is higher then you will get that amount.
Whether you are eligible for benefits or not, and the amount of those benefits, will be affected by your age. You may not collect benefits until your spouse is entitled to benefits or is receiving benefits and you are at least 62 (there are exceptions if you are disabled or if you taking care of a child under age 16 or a disabled child). If you start collecting benefits from on your spouse's account at age 62 (before you reach your full retirement age), then the amount of your monthly benefit will be permanently reduced. Ultimately, you will get the same amount of total benefit, but the monthly amount is reduced to reflect the fact that the benefit is being paid out over a longer period of time. If you wait until you reach your full retirement age then you will get the full benefit. The full benefit would be 50% of the amount to which your spouse is entitled. That does not mean that your split the benefit- your spouse will still get 100% of their benefits and you will get a benefit equal to 50% of that amount.
Impact of Divorce on Retirement Benefits
So, how will a divorce impact this benefit? The length of your marriage and whether you remarry are the factors that will affect your benefits.
If you have been married to your spouse for 10 years then a divorce will not affect this benefit at all. You will have the same entitlements. If you have been married for less than 10 years however, you will not be eligible for any retirement benefits through your spouse. Many people have criticized this 10-year rule as being arbitrary. Nonetheless, it makes all the difference.
If you remarry, you are not entitled to any benefits, but if that marriage ends in a divorce or death of your partner then you could become eligible again for your former spouse's benefits. Of course, if you are eligible for retirement benefits through both individuals you would want to determine which benefits are higher.
Social Security benefits cannot be distributed in a divorce agreement. They cannot be bartered away by either party. They may be considered, however, if you and your spouse or a court, has to decide how to allocate other property. Knowing how the system works and how your benefits will be calculated is useful. If you are very close to being married for 10 years, for example, you may agree with your spouse to put off the divorce until 10 years is reached. This will allow you receive benefits from Social Security. This is not only an advantage for you; it is an advantage for your former spouse- the support from Social Security could ease some of the burden of providing financial support for a less well-off spouse. If you are not sure how a divorce will impact your retirement then contact the Social Security Administration for more information or consult an attorney.
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