When you’re facing divorce proceedings at or near age 60, one of the most critical yet overlooked aspects of your case involves Social Security benefits. Your ex-spouse’s Social Security record may entitle you to significant monthly benefits that could substantially impact your post-divorce financial security. Many people going through divorce are unaware that divorce doesn’t automatically terminate their rights to claim benefits based on their former spouse’s earnings record. In fact, you may be entitled to receive up to 50% of your ex-spouse’s full retirement benefit—even if they remarry or haven’t filed for benefits themselves. This is not something that gets automatically addressed in your divorce judgment, nor will the Social Security Administration seek you out to inform you of these rights. Understanding these benefits now is crucial for making informed decisions about your divorce settlement and future financial planning. The rules governing divorced spouse benefits are intricate, with specific timing requirements and eligibility criteria that can significantly affect the value of these benefits to you.
Understanding the Legal Framework: Why Age Matters in Social Security Claims
From a legal standpoint, Social Security operates under strict federal regulations that determine when and how you can access benefits. Social Security is fundamentally a federal insurance program governed by the Social Security Act, not a discretionary benefit program.
The legal structure works as follows: During your working years, you and your employers are required by federal law to contribute to Social Security through payroll taxes. Employees contribute 6.2 percent of their wages, while employers match this contribution. Self-employed individuals must pay the full 12.4 percent themselves, up to the annual wage cap.
The Social Security Administration operates under a credit system established by federal regulation. You earn credits based on your annual earnings, with a maximum of four credits per year available when you earn at least $6,920 (as of 2024). The legal threshold for benefit eligibility is 40 credits, typically achieved after 10 years of covered employment.
However, the age at which you claim benefits has profound legal and financial implications that directly affect your divorce settlement considerations. Your “full retirement age” is statutorily defined based on your birth year, ranging from 66 to 67 years old. This isn’t merely a suggestion—it’s a legal benchmark that determines your benefit calculation.
If you file for benefits before reaching full retirement age, federal regulations mandate a permanent reduction in your monthly payments. This reduction can be as much as 30 percent if you claim at age 62. Conversely, if you delay claiming benefits past full retirement age, you’re legally entitled to delayed retirement credits that increase your benefit by 8 percent per year until age 70.
Legal Strategy: Determining Your Optimal Claiming Timeline
The decision of when to claim Social Security benefits should be integrated into your overall divorce strategy and post-divorce financial planning. This decision will have binding, long-term consequences that cannot be easily changed.
Several legal and practical factors must be considered in your specific case:
Your current health status and ability to continue working are paramount. If you’re unable to work due to health issues and lack sufficient assets to sustain yourself until full retirement age, early claiming may be legally and practically necessary, despite the permanent reduction in benefits.
Your ex-spouse’s benefit entitlement also affects your strategy. If your former spouse has a substantially higher earnings record and you’re entitled to divorced spouse benefits, the timing of their claim may influence your optimal strategy.
Your other retirement assets and their legal protection in the divorce must be evaluated. If you’re receiving substantial retirement accounts or other income-producing assets in the settlement, you may have the luxury of delaying Social Security to maximize the benefit.
Understanding Early Retirement at Age 62: Legal Implications
Age 62 represents the earliest age at which you can legally claim Social Security retirement benefits. However, this decision carries permanent consequences under federal law.
When you claim benefits at 62, the Social Security Administration is legally required to reduce your monthly payment for life. This reduction is calculated based on the number of months before your full retirement age, and it can result in a reduction of up to 30 percent of your full benefit amount.
However, there are legitimate legal and financial reasons why claiming at 62 might be appropriate for your situation:
If you’re no longer capable of working and lack sufficient savings to bridge the gap to full retirement age, early claiming becomes a practical necessity. The law provides this option specifically for individuals in your situation.
If you have a chronic health condition or family history that suggests a shorter life expectancy, claiming benefits early may result in higher lifetime benefits despite the monthly reduction.
If you’re entitled to divorced spouse benefits and your ex-spouse has already filed for benefits, you may be able to claim on their record while allowing your own benefit to grow through delayed retirement credits.
Full Retirement Age Strategy: Maximizing Your Legal Entitlement
For individuals born in 1960 or later, full retirement age is 67 under current federal law. This age represents the point at which you’re legally entitled to receive your complete, unreduced Social Security benefit.
Your full benefit amount is calculated using a complex federal formula that averages your highest 35 years of earnings, adjusted for wage inflation. Generally, higher lifetime earnings result in higher benefits, up to the maximum taxable wage base for each year.
From a legal standpoint, waiting until full retirement age offers several advantages that you should consider in your post-divorce planning:
Additional years of higher earnings (common in later career stages) can replace lower-earning years in your benefit calculation, potentially increasing your monthly payment.
You can continue working without the earnings limitations that affect early retirees. Federal law imposes strict limits on how much early retirees can earn without having their benefits reduced.
When you pass away, your surviving spouse (or eligible ex-spouse) will receive a higher survivor’s benefit based on your unreduced benefit amount.
Delayed Retirement Strategy: Maximizing Benefits Until Age 70
Federal law provides delayed retirement credits for each month you postpone claiming Social Security past your full retirement age, up until age 70. These credits increase your benefit by approximately 8 percent per year, representing a significant enhancement to your monthly payment.
It’s important to understand that federal law stops providing delayed retirement credits after age 70, so there’s no legal advantage to waiting beyond that point to file for benefits.
Delaying benefits until age 70 may be strategically appropriate if:
You want to maximize your monthly Social Security income and have other resources to support yourself in the interim.
You want to ensure the highest possible survivor’s benefit for your current spouse (if you remarry) or other eligible beneficiaries.
You’re in excellent health with a family history of longevity, making it likely you’ll live well beyond average life expectancy.
Retirement Timing vs. Benefit Claiming
Your decision to retire from work and your decision to claim Social Security benefits are legally and practically separate choices. You can retire from your career while delaying Social Security, or you can claim Social Security while continuing to work (subject to earnings limitations if you’re under full retirement age).
The timing of your Social Security claim will have permanent consequences for your financial security. Unlike many other legal decisions, this choice generally cannot be reversed or modified once made.
There is no universally “correct” age to claim benefits that applies to every client. Your optimal strategy depends on numerous factors specific to your situation: your health, your ability to continue working, your ex-spouse’s situation, your life expectancy, your other retirement savings, and the specific terms of your divorce settlement.
Professional Legal and Financial Guidance
Given the complexity of these federal regulations and their interaction with divorce proceedings, it’s strongly recommended that you work with qualified legal and financial professionals who can model different claiming strategies based on your specific circumstances. This collaborative approach ensures that your Social Security claiming decision aligns with your overall post-divorce financial plan and legal interests.
Remember, the Social Security Administration will not proactively advise you on the best claiming strategy for your situation. It’s your responsibility to ensure you understand and exercise your rights under federal law to optimize your benefits.
The decisions you make regarding Social Security will affect your financial security for the rest of your life. Working with experienced professionals can help ensure you’re making informed choices that protect your legal and financial interests in your post-divorce future.
Should you need the assistance of an experienced divorce attorney in Creve Coeur, St. Charles, or O’Fallon, or have questions about your divorce situation, know that we are here to help and ready to discuss those questions with you.