Divorced clients can get spousal Social Security benefits

Divorce is hard. The process is difficult for many reasons. One of the most talked about is division of assets – separating everything you owned as a couple. The way those assets are split up could have a great effect on retirement plans.

Social Security benefits are not divided when a couple divorces. But, an ex-spouse can claim spousal benefits through the Social Security Administration.

Most couples are not comprised of two equal wage earners. One spouse may have opted out or reduced their time in the workforce during their marriage. This would result in that spouse having lower earnings, meaning lower benefits through Social Security. 

If you are helping to establish a retirement plan for a client who is divorced, be aware that they may be eligible for a spousal benefit. Claiming a spousal benefit could offer greater supplementary income for a divorced client during retirement. Of course, Social Security cannot be the sole foundation for any financial plan for retirement.

An ex-spouse who files for divorced spousal benefits would receive benefits based on either their own work record or their ex-spouse’s work record. The claiming ex-spouse would receive benefits based on whichever benefit is greater but cannot claim both.

Collecting a Social Security divorced spousal benefit will not diminish the worker ex-spouse’s benefits at retirement. The claim is confidential – the worker will not know if the ex-spouse filed a claim.

One of the main requirements for a former spouse to be entitled to Social Security benefits on a worker’s account is for the couple to have been married for at least 10 years.

The ex-spouse who is the worker must be entitled to receive Social Security benefits, be age 62 or older, and have applied for retirement benefits. It the ex-spouse who is the worker has not applied for retirement benefits, then the couple must have been divorced for at least two continuous years for the other ex-spouse to claim benefits. The ex-spouse who is claiming benefits must be age 62 or older, not currently married, and their own benefits must be less than the spousal benefit.

A client may be eligible to receive a spousal benefit based on their ex-spouse’s earnings history if they meet certain criteria. The claiming spouse will need their ex’s Social Security number, proof of marriage, and final divorce decree to make the claim, and may need additional information.

This is not a comprehensive list of all the rules involving Social Security benefits for divorced spouses. For example, there are also rules for surviving divorced spouses and rules related to continuing work when applying for divorced spouse’s benefits.

A divorce can have a profound effect on a person’s finances long after they sign the papers. A financial professional can help them assess their options for how to fund their retirement.