Divorce & Money

Q&A: Divorced spousal benefits

August 12, 2019 By Liz Weston

Dear Liz: I never expected to be where I am financially. I work as an independent piano teacher and my present earnings are just enough to get by (which isn’t saying much in Southern California). I was married for 18 years and am now single, with no plans to remarry.

After I turn 66 next year, I intend to apply for Social Security benefits as a divorced spouse because my personal Social Security benefits would amount to just $875 a month and my ex is doing quite well (with earnings somewhere in the six-figure range). I anticipate the divorced spousal benefit will be greater than my own.

But I have a lot of questions. Will waiting until my former husband is 66 or 70 (he is 64) do anything to maximize my benefits? Will my Social Security be taxable? How much am I allowed to continue earning if I also receive Social Security?

Answer: Spousal and divorced spousal benefits can help lower earners get larger Social Security checks. Instead of just receiving their own retirement benefit, they can receive up to half of the higher earner’s benefits at the higher earner’s full retirement age. But divorced spousal benefits are different in some important ways from the spousal benefits available to married people.

If you were still married, you couldn’t get a spousal benefit unless he was already receiving his own.

Divorced spousal benefits are available if your marriage lasted at least 10 years and you aren’t currently married. If you meet those qualifications, you can apply for divorced spousal benefits as long as both you and your ex are at least 62 — he doesn’t need to have started his own benefit. Your divorced spousal benefit will be based on his “primary benefit amount,” or the benefit that would be available to him at his full retirement age (which is 66 years and two months, if he was born in 1955). It doesn’t matter if he starts early or late; that doesn’t affect what you as his ex would receive.

Spousal and divorced spousal benefits don’t receive delayed retirement credits, so there’s no advantage for you to delay beyond your own full retirement age (which is 66, if you were born in 1954) to start. Your benefit would have been reduced if you’d started early, though, so you were smart to wait.

Also, waiting until your full retirement age means you won’t be subjected to the earnings test that otherwise would reduce your checks by $1 for every $2 you earn over a certain amount ($17,640 in 2019).

Q&A: Sorting out the ex’s benefits

July 29, 2019 By Liz Weston

Dear Liz: I am 68 and plan to delay starting Social Security until I’m 70. I was married for 15 years prior to an amicable divorce 15 years ago. My ex just turned 60 and remains unmarried but may possibly marry at some future time. Does she qualify for survivor benefits? If so, what can I do to help ensure that she can efficiently apply for that benefit? We have already reviewed her option to assume my benefit upon my demise, but our benefits are virtually at identical levels and so that option does not seem applicable.

Answer: You seem to have confused divorced survivor benefits with divorced spousal benefits. She may well be eligible for both, but the only way you can help her get survivor benefits is to die. It’s great that you two are still friends, but that may be taking friendship a little too far.

Your ex is too young to claim a divorced spousal benefit, which isn’t available until she turns 62. She wouldn’t be able to get the full amount, which is 50% of your benefit at your full retirement age, until she reaches her own full retirement age. If she was born in 1959, then her full retirement age is 66 years and 10 months.

Furthermore, she would get a divorced spousal benefit only if that’s larger than her own benefit. If your benefits are “virtually identical,” that’s not likely to be the case.

If you should keel over tomorrow, though, she would be eligible to receive a divorced survivor benefit and put off receiving her own. Survivor benefits are available starting at age 60, or age 50 if the survivor is disabled, or at any age if the survivor cares for the dead person’s child who is under 16. Your ex also could marry at 60 or older without losing her survivor benefit. People who receive divorced spousal benefits, on the other hand, lose that benefit if they remarry.

Q&A: Rules about a dead ex’s pension

July 22, 2019 By Liz Weston

Dear Liz: My ex-spouse passed away recently. She had a pension, and I got 25% of the monthly amount (we had a Qualified Domestic Relations Order to divide the pension). I am now the survivor, but I still get the same amount every month. Shouldn’t I be getting what she received?

Answer: Pensions for survivors don’t always increase when the primary worker dies, and sometimes they go away entirely.

That makes them different from Social Security, where a surviving spouse would get the larger of the two checks a couple received. A qualifying divorced spouse may also qualify to get a Social Security check equal to what the deceased was getting.

What happens to the pension probably depends on the details of your QDRO. Pension companies don’t always give survivors accurate information, so check with your lawyer to see what is supposed to happen according to your agreement.

Q&A: About the ex’s Social Security

July 1, 2019 By Liz Weston

Dear Liz: I’ve been divorced since 2004. My ex received half of all my pension funds and lives off that and his Social Security. I have not yet drawn Social Security, but I am retired. Am I eligible to receive part of his Social Security? How does that work?

Answer: Yes, if your marriage lasted at least 10 years. If you were born before Jan. 2, 1954, you also have the option of filing a “restricted application” for divorced spousal benefits while allowing your own benefit to continue growing.

Divorced spousal benefits, like regular spousal benefits, allow you to get an amount of up to half your ex’s benefit. The amount would be reduced if you start before your own full retirement age, which is currently 66 and rising to 67 for those born in 1960 and later. If you start at age 62, for example, you would get about one-third of his benefit, rather than half. (Your claim doesn’t take money away from him or any of his current or former spouses, in case you were concerned.)

Regular spousal benefits require that the primary worker has started his or her own retirement benefit. Divorced spousal benefits don’t have that requirement: You both just need to be at least 62. Also, the divorced benefit is based on the primary earner’s benefit at his or her full retirement age. With regular spousal benefits, the amount is typically based on what the primary earner actually receives, which could be less if the primary earner started benefits early.

If you were born on or after Jan. 2, 1954, you can’t file a restricted application. Instead, you’ll be deemed to be applying for both your own benefit and the divorced spousal benefit, and given the larger of the two amounts. You can’t switch to your own benefit later.

If your ex should die before you do, you also would be eligible for a divorced survivor benefit that is up to 100% of his. That has the unfortunate effect of making your ex worth more to you dead than alive.