By Chris Chen, CFP®
The Social Security Act of 1935 introduced an essential feature of modern retirement planning. For the first time, people could have a retirement benefit based on their work history, regardless of whether they had otherwise saved.
We sometimes forget that the original Social Security Act included benefits for workers only, not their spouses. Even when women worked outside the home in those days, they were not considered the primary family breadwinner. In a sweeping series of amendments in 1939, the Social Security Administration extended benefits to spouses and minor children. Wives who had not earned a Social Security retirement benefit or whose retirement benefit was less than 50% of their husbands qualified.
Keeping up with changing social customs, another amendment extended Social Security retirement benefits to divorced ex-wives with marriages longer than 20 years. In the 1970s, the word "spouse" replaced "wife," allowing ex-husbands to collect retirement benefits on their ex-wives record.
Later, the time required to qualify for benefits after divorce was reduced to 10 years of marriage. In 2015, the Supreme Court legalized same-sex marriage, extending survivor and divorce benefits to same-sex couples.
As you can see, amendments to Social Security somewhat kept it up with changing times. For retirees who have had multiple marriages, spouses - ex-wives OR ex-husbands - retirement benefits are based on an ex-spouse's work record. However, qualifying conditions must be met.
The rules are confusing and challenging to keep track of, especially for people who have had more than one marriage and divorce, or when an ex-spouse has passed away. Let us take a look at the details.
Benefits for Divorced People
Suppose a divorced spouse claims their benefit at Full Retirement Age (FRA) or later (FRA is determined by the Social Security Administration). As long as they're not remarried and do not qualify on their own record, they will receive 50% of the ex-spouse's Primary Insurance Amount (PIA).
For example, let's say that Jack and Jill are divorced. Jack's PIA is $2,600. Jill does not qualify for a benefit on her own record. Jill files for her divorced-spouse benefit at age 66, her Full Retirement Age. She will receive 50% of Jim's PIA, $1,300, as her divorced-spouse benefit.
As with other Social Security retirement benefits, the earlier you claim, the less you get. The older you are when you claim your benefits, the more you receive. With Social Security, if you delay receiving benefits until 70, you will maximize your benefit amount.
But, divorced people who claim on their ex-spouse's record maximize their benefit at FRA. That varies from age 66 to 67, depending on the birth year.
It's important to note that if Jill's own benefit is more than 50% of Jack's, she will receive her own benefit. She cannot get both hers AND 50% of Jack's. In this case, Jack's benefit is not relevant.
The good news for the divorced person is the ex-spouse's age when they claim it is irrelevant. For example, as long as Jill claims at FRA, she will receive her maximum benefit regardless of the timing of Jack's claim.
A person claiming on a spouse's record must be unmarried at the time. So unfair, you say? In the previous example, say Jill has remarried. Under the right circumstances, she could get 50% of her current spouse's benefits, or her own, if her own is more than 50% of her spouse's.
Jack may be married or unmarried. It makes no difference for Jill's benefit. If Jack had remarried, then Jill as well as Jack's current wife can both get the 50% benefit from Jack's record. For that matter, they can both get upgraded to the full benefit at FRA.
Suppose Jill remarries. In that case, her 50% benefit stops unless her new spouse also gets a divorced retirement benefit. Because nothing is simple when it comes to Social Security, that's except if the remarriage occurs after age 60.
To claim Social Security retirement benefits on an ex-spouse's record, you must have been married ten years or longer. Because of that, sometimes people who are contemplating divorce will delay until ten years are clocked. For instance, if you've been married 9.5 years, it may be financially fruitful to wait for another six months.
Sometimes people get divorced later than they think. People often believe their court appearance date is the divorce date. However, in most states, the actual date is later than that. Such as in Massachusetts, where it is 90 or 120 days later, depending on the type of divorce.
Multiple Divorces and Marriages
What happens if you have had two ten year marriages?
The complexity increases. If someone divorces twice, they can choose the higher of the two ex-spouse's benefits, as long as the applicant is currently unmarried.
For example, say Sheryl was married to Sam for 20 years. Then, she was married to Simon for 12 years. Sheryl is now divorced and has been single for more than two years since her divorce from Simon.
Sam's PIA is $2,600, and Simon's PIA is $2,400. In this case, Sheryl doesn't qualify for a retirement benefit on her own record. She is at Full Retirement Age (66 or 67, depending on the birth year).
When she files, she can receive half of Sam's PIA since it is higher than Simon's. And, no, she cannot get both Sam's and Simon's benefits.
If the Social Security applicant has been divorced for less than two years, he or she must wait until the ex has filed for their benefit. The worker on whose record the retirement benefit is claimed must be at least 62 years old.
If the divorce happened more than two years before, the worker's filing status is irrelevant to the ex's claim. The worker will never know if his or her ex has claimed.
Let's see how this worked for Mike and Maria. They were married for more than ten years and divorced for more than two years. Mike and Maria are both 62 years old. Maria has not remarried. As she's single, Maria qualifies for a divorced-spouse retirement benefit based on Mike's work record, regardless of whether Mike has filed or not. Keep in mind that the earlier you claim, the less you get! We usually recommend that people wait until FRA to claim the divorced spouse retirement benefit.
If the ex-spouse passed away, a divorced person receives a divorced-spouse survivor benefit based on the ex-spouse's record. That is, so long as the survivor is currently unmarried or, if remarried, remarried after age 60.
Furthermore, the benefit will be 100% of the ex-spouse's Primary Insurance Amount (PIA), the amount the ex-spouse would have received at full retirement age (66 or 67). In death also the retirement benefits of ex-spouses are capped at Full Retirement Age.
What if Jack and Jill have married, divorced, remarried, and divorced again. What if they have had multiple marriages and divorces? The two marriages can be added together (including the time in between) to determine the ten-year qualification threshold. That is, so long as the second marriage, the remarriage, happens before the end of the calendar year following the divorce!!
Let's see if we can straighten out this muddle for Pedro and Pauline. They were married from May 2008 to August 2015 (7 years). They married for a second time in December 2016 and divorced again in November 2019 (3 years). They meet the 10-year marriage requirement because the second marriage took place before the end of the calendar year following the first divorce. If they had remarried in January 2020, the ten year clock would have started again.
The Downside of Some Pensions
What if Jill, who is applying for the divorced-spouse retirement benefit, worked in a job not covered by Social Security? For example, if Jill worked for a state or municipal government, she may qualify a pension from their employer.
Because, usually, municipal and state governments are exempt from participating in the Social Security system, Jill or her employer would not have paid Social Security taxes, and, therefore, Jill would not qualify for Social Security retirement benefits. Also, Jill's Social Security divorced-spouse retirement benefit is reduced by 2/3 of the amount of her pension under the Government Pension Offset (GPO) rule.
Depending on the amount of her pension, the offset may completely eliminate her social security.
Let us do the math on this conundrum. Jill worked as a teacher in Texas, where neither she nor her employer paid into Social Security. She is currently receiving a pension of $3,000 per month. She is divorced from Jack, to whom she was married for more than ten years. Jack's PIA is $2,800. Jill's divorced-spouse benefit of $1,400 (50% of Jack's PIA were she to claim at FRA) would be reduced by $2,000 (2/3 of her $3,000 pension), reducing the Social Security benefit amount to zero.
All may not be lost, however. If Jack dies before Jill, she will become eligible for a divorced-spouse survivor benefit. After the GPO reduction she will receive $800 ($2,800 - $2,000 equals $800).
Suppose the spouse with the benefit, Jack, in the example above, also qualifies for a pension from an entity that doesn't pay into Social Security. In that case, the Windfall Elimination Program kicks in. That reduces Jack's retirement benefits, and Jill's benefits would adjust downward as well.
How to Claim on an Ex-Spouse’s Social Security
What information do you need to claim? You will need the name and Social Security number of your ex-spouse as well as the divorce decree. You may be able to find the Social Security number on old documents such as a tax return.
If you don't have the Social Security number, you may need additional information, such as birth dates and addresses. The Social Security Administration won't make the task easy in this case.
For many ex-spouses, Social Security provides an essential source of income, even if it is reduced by 50%. The difference between the two benefits is large enough to add up to significant amounts, in some cases in the hundreds of thousands of dollars. The consequences are rarely considered in analyses of divorce consequences.
They should be.
About the author: Chris Chen, CFP®
Chris Chen, CFP® is the founder of Insight Financial Strategists LLC in Newton, MA. As a Wealth Strategist, Chris works with women who want to plan for a brilliant retirement post-divorce. He is the co-host of Divorce Friday, the podcast that addresses your financial questions about divorce. You can email him at email@example.com.