Q&A: Social Security versus government pensions

Dear Liz: I have a dear friend who after 48 years of marriage went through a horrible divorce. She worked for a school district that did not pay into Social Security but her ex was self-employed and did pay into the system. I advised her to apply for spousal benefits but she was told she was not entitled due to her pension. Is this right? Social Security is a federal program. What does it have to do with a state or county pension? I feel she is being cheated out of income she could desperately use.

Answer: It’s unfortunate that your friend is struggling. But she’d be worse off trying to live on a spousal benefit from Social Security than she is now.

People who get pensions from jobs that didn’t pay into Social Security may be subject to two provisions, the windfall elimination provision and the government pension offset. WEP can reduce but not eliminate any Social Security retirement benefit they earned from other jobs that paid into Social Security. Typically, the Social Security benefit at full retirement age won’t be reduced by more than half the pension amount.

GPO, by contrast, reduces a Social Security spousal or survivor benefit by two-thirds of the amount of the pension. That means GPO can entirely eliminate a Social Security benefit based on someone else’s work record. If your friend can’t qualify for a divorced spousal benefit, that means she’s already receiving more from her pension than she would get from Social Security.

Consider helping your friend look for other ways to make ends meet. Benefits Checkup, offered by the National Council on Aging, could help her find programs that could help pay for medical care, groceries, utilities and other necessities.

Q&A: Social Security benefits for exes

Dear Liz: I divorced after three decades of marriage, and my ex remarried before age 60. If I understand Social Security’s rules correctly, that remarriage disqualified my ex from claiming a survivor’s benefit based on my work history. Here’s my question: If my ex’s current spouse dies before he does, does that then make him eligible to claim a survivor benefit on MY work history? I am retired and collect my Social Security benefit; he too is retired and presumably collecting his.

Answer: Yes. If your ex is widowed, he typically would have the option of taking a survivor benefit based on his most recent spouse’s work history, or a divorced survivor benefit based on your work history, instead of his own benefit. His choice would not affect how much you receive.

Q&A: Spousal and divorced spousal benefits are available only while the primary worker is still alive

Dear Liz: You recently answered a question about divorced survivor benefits. Is the survivor benefit going to be 100% of what the deceased ex-spouse was receiving at death or 100% of the ex’s benefit at full retirement age? My ex-wife is 65, the marriage lasted 34 years, it’s been two years since our divorce and she’s planning to retire at her own full retirement age.

Answer: The last part of your question indicates you’re asking about divorced spousal benefits, not divorced survivor benefits … unless you’re reaching out from beyond the grave.

Here’s a quick primer. Spousal and divorced spousal benefits are available only while you, the primary worker, are still alive. Your ex could receive up to 50% of your benefit at full retirement age, assuming that benefit is greater than her own.

The rules change once you’re dead. Should you die before your ex, she may qualify for divorced survivor benefits. Divorced survivor benefits, like regular survivor benefits, are based on what you were actually receiving or had earned at the time of your death. If you died at 69 before beginning to claim Social Security, for example, your benefit would have earned at least a couple years’ worth of delayed retirement credits. Your ex could qualify for 100% of that enhanced benefit if she applied for it at her own full retirement age.

Your ex also would have the option of starting divorced survivor benefits and then switching to her own larger benefit later, or vice versa. She also could remarry at age 60 or later and not lose her benefit. By contrast, spousal and divorced spousal benefits end with remarriage, and people typically can’t switch between those benefits and their own.

Q&A: Home equity in community property states

Dear Liz: I live in California and have been married for 20 years. My spouse bought our home before our marriage and my name is not on the title as a co-owner. However, I contribute to most of our monthly financial obligations which include paying the mortgage, property taxes, etc. In the event of death or separation, how much of the current home equity am I entitled to? This is our only and primary residence.

Answer: Normally, an asset that was purchased before marriage is considered separate property even in community property states such as California. But if the mortgage is paid down with “community funds” — money earned by either spouse during the marriage — then the spouse who isn’t on the title may be entitled to some of the appreciation that occurs after the wedding.

That may not prevent you from being evicted if your spouse dies, however, or having to fight an expensive battle in court if you divorce. Consulting an attorney now could help you better prepare for either possibility.

Q&A: Married more than once? Here’s what that means for Social Security survivor benefits

Dear Liz: I’m in a second marriage that’s lasted 10 years. Is my wife fully entitled to my Social Security after I die? My first wife and I were married for 19 years. Is my ex entitled to any of it?

Answer: Both your current spouse and your ex could be entitled to survivor benefits based on your work record. Typically someone must be married nine months to qualify for survivor benefits on a current spouse’s record. If the spouses divorced, the marriage must have lasted 10 years. Each survivor benefit can be up to 100% of your benefit. The amount may be reduced if the women start benefits before their own full retirement age, but they don’t have to share — the amount isn’t reduced because you’ve had more than one spouse.

Q&A: Divorced spouse benefits and remarriage

Dear Liz: My recently divorced girlfriend receives Social Security based on her ex-husband, who is still living. If we were to get married, would either of us lose part or all of our Social Security benefits? It seems like a simple, straightforward question, but every Social Security representative I speak with by phone or in person gives me a different answer. My girlfriend did not work long enough to earn her own Social Security benefits. She was married over 30 years and is over 60.

Answer: The answer to this question isn’t complicated, so it’s unclear why you got different answers. If the ex-spouse is still alive, then your girlfriend’s benefit is a divorced spousal benefit that ends if she remarries.

If the ex-spouse were not alive, then your girlfriend would be receiving a type of survivor benefit known as a divorced survivor benefit. People receiving survivor benefits can keep them after marriage if they are 60 or older at the time of the marriage.

Q&A: When Social Security isn’t enough

Dear Liz: I am 87, divorced for 45 years, never remarried. I applied for my 93-year-old former husband’s Social Security support and qualified. I was refused by the local Social Security office. I really don’t understand why. I am a COVID long-hauler and I get confused. I was a stay-at-home mom until my kids were in college, and my husband divorced me. My Social Security is not enough to support me, and I am seriously in debt. I am set up with Social Security to receive my share of my former husband’s Social Security at the time of his death. What am I doing wrong?

Answer: If your former husband is still alive, it’s possible that your current Social Security retirement benefit is larger than any benefit you would have gotten from his work record. Spousal and divorced spousal benefits are limited to 50% of the primary worker’s benefit at full retirement age.

Should he die, you could be eligible for a divorced survivor benefit, which is up to 100% of the amount he was receiving.

Rather than wait, though, you should consider talking to a bankruptcy attorney about your debt. Consider asking one of your kids or a financially savvy friend to come with you and take notes so you understand your options.

Q&A: Social Security rules differ for divorced spouses and divorced survivors. We explain

Dear Liz: My spouse’s parents were married for 11 years. They divorced at age 32 and my mother-in-law remarried at 42. My mother-in-law and her ex are now 82. Her husband is 93 and in poor health. When her husband dies, she does not get his pension. Her current Social Security benefit is $850 a month. Her husband receives $1,200 while my father-in-law’s benefit is $2,500 a month. She is convinced that when her current husband dies, she will be eligible for her ex-husband’s $2,500 benefit. I think that only happens when her ex dies, but she can get 50% while he is still alive. What is correct?

Answer: You’ve got it right.

People may be eligible for benefits from ex-spouses’ work records if the marriage lasted at least 10 years.

While the ex is alive, your mother-in-law could qualify for divorced spousal benefits of up to 50% of his benefit at full retirement age — but only if she is currently unmarried. If her ex dies, she might be eligible for divorced survivor benefits of up to 100% of the benefit he was receiving — but only if she is widowed or divorced. (People can receive divorced survivor benefits while married, but only if they married at 60 or later.)

She would receive benefits based on her ex’s work record only if the check is larger than her own.

The different rules for divorced spousal versus divorced survivor benefits can be complicated, so it’s not surprising that she’s confused. Let’s use the numbers you provided to make this somewhat clearer.

If she is widowed and her ex is still alive, she would get a divorced survivor benefit of $1,250, because it’s (slightly) larger than the $1,200 survivor benefit from her husband’s record. (Her own $850 benefit would essentially go away, so her household income would drop pretty dramatically from $2,050 plus the pension to $1,250.)

If her ex should subsequently die, she would be eligible for divorced survivor benefits of $2,500 (or whatever the ex was receiving at the time of his death).

There are some caveats here.

Divorced spousal benefits are based on the ex’s “primary insurance amount,” or what he would receive at his full retirement age. For someone born in 1940, that was 65 years and six months. Your mother-in-law would not be eligible for any delayed retirement credits her ex may have earned by putting off his application until after his full retirement age.

On the other hand, she wouldn’t be penalized if he started his benefit before full retirement age. The bottom line is that her divorced spousal benefit could be somewhat more or less than 50% of what he is currently receiving, depending on when he applied.

Survivor and divorced survivor benefits, on the other hand, are based on what someone was actually getting when they died. An early start can stunt those benefits whereas a later start can increase them.

That’s true of regular survivor benefits as well, and why it is so important for the higher earner in a married couple to delay filing as long as possible. The larger benefit can really help when the first spouse dies and one of the couple’s two checks ends.

Your mother-in-law’s financial prospects were made even worse by the decision to get a “single life” payout from the pension rather than a “joint and survivor” option. The joint and survivor option would have meant accepting a smaller benefit, but it would have lasted for your mother-in-law’s lifetime rather than ending at her husband’s death.

A married worker can’t choose the single life option without spousal consent, and spouses would be smart to consult a fee-only financial planner before they agree to give up a lifetime stream of income.

Q&A: Claiming divorced spousal benefits

Dear Liz: My son is 59, and his ex-wife died approximately 12 years ago. She was a nurse and paid more into Social Security than he has. Is he entitled to her Social Security benefits as indicated in your article? How does he file and get more information? Must he wait until he is 62?

Answer: If their marriage lasted at least 10 years, he could begin divorced survivor benefits as early as age 60, or age 50 if he is disabled. (He can remarry at age 60 or later and still receive survivor benefits.)

Benefits are reduced if he applies before his full retirement age, which will be 67. Also, starting before full retirement age means the benefits are subject to the earnings test that withholds $1 in benefits for every $2 earned over a certain amount, which in 2023 will be $21,240.

If he earns too much to make starting early worthwhile, he could apply for divorced survivor benefits at age 67, when the earnings test goes away. His own retirement benefit could continue to grow until age 70, and he could switch at that point if his own benefit is larger.

But he’d be smart to consult a financial planner or use a Social Security strategy site, such as Maximize My Social Security or Social Security Solutions, to craft the best approach.

He can call Social Security’s toll free number at (800) 772-1213 for more information.

Q&A: Divorce complicates retirement benefits

Dear Liz: I was told by Social Security that because I remarried at 60, I could still collect half of my ex’s benefits once he died. He has just died, and half of his benefit is greater than my own retirement benefit. My current husband has not started benefits. If I collect half of my ex’s benefit but want to later switch to collecting benefits on my current husband’s record (once he starts to collect) or to survivor benefits should he die before I do, can I do that?

Answer: The short answer is yes, although you’ve confused divorced spousal benefits with divorced survivor benefits.

While your ex was alive, you might have been eligible for a divorced spousal benefit if you had remained unmarried. That benefit would have been up to 50% of your ex’s primary insurance amount (the amount he would receive at his full retirement age).

The rules changed once your ex died. As a divorced survivor who remarried after age 60, you are entitled to up to 100% of what your ex was receiving. The survivor benefit will be reduced if you haven’t yet reached your full retirement age (which is currently between age 66 and 67).

Survivor benefits also offer more flexibility to switch later than other types of benefits. If you choose to begin receiving a surviving divorced spouse’s benefit now, you can switch to your own benefit at any point through age 70, if your benefit is higher, says William Meyer, founder of the Social Security Solutions claiming strategies site. You also can switch to receiving spousal benefits from your current spouse’s record once he starts collecting, if that benefit is greater than what you’re receiving from your former spouse’s record.

Figuring out the right way to claim can be tricky, so consider consulting an advisor or using claiming strategy software to determine what’s best in your situation.