Situational Social Security: Divorced Spouse

We emphasize SITUATIONAL SOCIAL SECURITY in the NSSA® Certificate program, as all your clients are UNIQUE. Your clients may be single, married with wide age differences, married with narrow age differences, divorced, surviving spouses, eligible to file a Restricted Application, public employees, etc. Advisors, (YOU), must understand the issues and questions that relate to every unique client. You are your clients’ trusted advisor and must understand Social Security.

My partner, Jim Blair, worked for the Social Security Administration for 35 years and retired in January 2010. Jim and I began our journey together at that time to help folks to understand and maximize their Social Security benefits. In January 2013, we created the National Social Security Advisor Certificate program. To date, more than 2,500 advisors across the country have earned the NSSA® certificate.

In this installment of Situational Social Security (SSS), we will discuss Social Security benefits relating to divorced individuals.  First, the rules for YOU to collect off an ex-spouse:

1. You must be single
2. You must be at least age 62
3. Marriage duration – ten continuous years
4. Your spouse MUST be COLLECTING a RETIREMENT or DISABILITY benefit if divorced for less than two years.

The requirement that your ex-spouse be receiving a benefit does not apply if the following conditions are met as “Independently Entitled Divorced Spouse” status will apply:

1. You and your ex are at least age 62
2. You are single
3. Marriage duration – ten continuous years
4. You and your ex have been divorced for at least two years

Restricted Application for Ex-spouse – Tom came in last week and met with Jim Blair. Tom was married to Alice for 25 years and have been divorced for 5 years. Additionally, Tom was born January 25, 1952. Tom told Jim, that Alice filed a Restricted Application and is collecting a spousal benefit off his work record. Tom asked Jim if he can also file a Restricted Application. Tom is eligible to file a Restricted Application as he was born by the MAGIC date of January 1, 1954 and the requirements stated above have been met.

Filing a Restricted Application will allow Tom to receive a spousal benefit while his own retirement benefit earns Delayed Retirement Credits. This is a very powerful strategy. Do you want to supercharge this strategy? Tom is also eligible to file The Restricted Application effective six months ago, (May), receiving a lump sum check for SIX months of retroactive spousal benefits. WOW!!!! Tom better file the Restricted Application by the end of November 30, 2020 or risk losing a month of spousal benefits.

Impact of Marriage – One of the requirements to collect off an ex-spouse is that the ex-spouse seeking to collect must be single. Mary come in a couple months ago. Mary has been receiving Social Security off her ex-husband, Sid, for several years. Mary plans on marrying Bob in March of 2021. Mary is concerned that her Social Security benefits off Sid will be impacted if she marries Bob. Her friend, Harold, told Mary that her benefit off Sid will continue after she marries Bob. Mary is not sure of Harold’s advice!  Mary is correct as she must be single to collect a spousal SS benefit off Sid. Harold is wrong again!  Upon marrying Bob, Mary’s benefits off Sid will terminate. However, Mary is eligible to collect a spousal benefit off her new husband, Bob if he is receiving a retirement of disability benefit. Generally, Mary would have to wait until married to Bob for a year. This requirement does not apply if Bob is collecting a Social Security benefit upon marriage.

Amount of Benefit off of Ex-Spouse – we will cover the calculation of spousal benefits, (current or divorced), in greater detail in another installment of Situational Social Security. For now, pleases understand that a spousal benefit is equal to 50% of the other spouse’s Full Retirement Age benefit, or Primary Insurance Amount, PIA. For example, if my PIA is $2,000 then my ex-spouse is eligible for $1,000 at her Full Retirement Age. If she takes early, the spousal benefit will be reduced for age. Spousal benefits do not increase after Full Retirement Age. As indicated, I will discuss the spousal benefit calculation in greater detail in an additional installment of SSS.

Additional strategies relating to ex-spouses will be discussed in the next installment of Situational Social Security.

The content on this blog is for informational purposes only and is not legal, financial, or professional advice. Social Security rules change periodically, so some information may become outdated. For the most accurate advice, consult a certified National Social Security Advisor (NSSA®). Social Security Professionals, LLC, and NSSA® are not responsible for any errors, omissions, or actions taken based on this blog's content. Use of this blog does not create a client relationship, and all information is provided "as is" without guarantees. By using this blog, you agree to hold Social Security Professionals, LLC, and NSSA® harmless from any claims or liabilities arising from its content. For personalized guidance, contact an NSSA® professional.