Social Security benefits are something that Americans count on for their retirement years. However, many people don't realize that if they get divorced, their Social Security benefits may be impacted. There are a few important things that divorced couples or those considering divorce who are in their 60s need to know.
First, you need to know about something called a divorced spousal benefit. You are eligible for this benefit only if you were married for at least 10 years and you divorced a minimum of two years ago. People who meet these criteria can claim either their own Social Security benefit or their ex-spouse's. One is likely higher than the other.
The earliest age at which people are eligible for either spousal or personal benefits is 62. However, a person can claim spousal benefits even if their spouse hasn't claimed their own benefits as long as you are both 62 or older and have been divorced for a minimum of two years.
Another key age to keep in mind is 66. This is the full retirement age. You can optimize your benefits by taking your divorced spousal benefit when you are 66 and delay taking your own benefit until you are 70. That way your personal benefit becomes higher.
You can also claim both benefits. Many divorced spouses optimize their Social Security by beginning their divorced spousal benefit at age 66, which is currently the full retirement age (FRA), and then switching to their own benefit at age 70. This is done by filing a restrictive application, and can significantly increase your overall Social Security benefits.
Restrictive filings are not allowed if a person claims one's divorced spousal benefits before one has reached full retirement age. He or she must take whichever benefit is higher -- spousal or personal benefit.
When people remarry after a divorce, things can become even more complicated. It's best to consult with a financial advisor to determine how best to handle your Social Security benefits.
Divorce can have significant financial implications for your life long after the proceedings are completed. It's always essential to discuss these matters with a North Dakota family law attorney as well as a financial advisor to help ensure that you are following the law and getting the greatest benefit possible from the money you have paid into Social Security for so many years.
Source: Fox Business, "5 Ways Divorce Can Impact Your Social Security Benefits" No author given, May. 13, 2014