On behalf of The Marks Law Firm, L.L.C. posted in Divorce and Social Security Benefits on Tuesday, June 24, 2014
When most people focus on dividing assets at divorce, they think of the marital residence, automobiles and retirement plans. Yet the most ubiquitous retirement plan of all – Social Security – most people forget, sometimes to their own peril.
Spend any time reading the newspapers for a month and you will find stories of elderly folk having to take ridiculous and often sad measures to make ends meet, whether to pay for necessary medication or even for food. Some of these individuals have been divorced for some time and feel ignored by the system.
Shocking as it may seem, many of these elderly probably have had a claim to funds that could have eased their burden, and they simply did not know it exists – a claim to a portion of their former spouse’s Social Security benefits.
Under federal law, if you were married for at least ten years you have a right to part of the Social Security retirement benefits of your former spouse. In situations where the former spouse earned a significant amount of money at the time of retirement, the benefit could be a literal lifesaver.
How exactly does this work?
Generally, full retirement occurs at age 66. The Social Security Administration (SSA) measures the maximum retirement benefit of the claimant, and it consists of a percentage of contributions made to the fund over the claimant’s working life. Logically, the more one earns over the years, the more the benefit will be at the time of retirement.
If a former spouse waits until age 66 to make a claim on his or her ex’s benefits, the former spouse can receive an amount equal to half of the ex’s full retirement benefit – and can continue to receive that amount on a monthly basis for the rest of his or her life.
If the ex takes early retirement, the benefit is still configured as if the ex had retired at age 66.
A former spouse can also seek benefits as early as age 62, but doing so reduces the benefit to somewhere between 35% and 50% of the ex’s full retirement benefits.
First important caveat: the former spouse seeking the benefits must not have remarried. On the other hand, if you had been married twice for at least ten years to both former spouses, you could claim from both former spouses.
Second important caveat: if your personal Social Security benefits would equal or exceed those of the former spouse, you will not have a right to claim those benefits. The system seeks to care for those who sacrificed during marriage by staying home and serving as a stay-at-home parent, and not as a separate windfall retirement plan.
So, if you find yourself nearing retirement age or past retirement age, and you meet the criteria, you may have benefits waiting for you that you did not realize exist.
If you have further questions about Social Security and divorce, contact us – we can help.