While we do our best to entertain and inform, today we have to tackle a tough topic. Not to be morbid, but we need to discuss death. Two types, actually – the death of a marriage (aka divorce) and actual death. Both of these types of death have profound implications for your social security benefits, and it’s never too early to be informed.
As you might have guessed, the rules pertaining to divorce and social security benefits are complicated (of course they are.) But below we will sketch out the basic facts you will need to know.
The magic number for divorced people and SS benefits is ten. If your marriage lasted ten years or longer, the SSA throws you a bone to ease your transition to retired single person. It is called the divorced spousal benefit, and once you’ve been divorced two years you can claim it.
It works like this – if you satisfy the two requirements above, you can claim either your own DSB or that of your ex-spouse – whichever is higher (generally, one ex can receive as much as 50% of the other’s benefit – less if initiated before FRA.) Or you can claim both! At full retirement age, many retirees begin collecting the higher of the two DSBs and keep collecting it until age 70. While they collect, their own SS benefit continues to grow. Then at 70 they switch to their own benefit, which in the four years could be worth as much as 30% more per month. Of course, you get that increased payment (plus COLAs) for life. See, it pays to know the rules.
Unfortunately, if you retire before FRA, you can’t use this trick. Rules require you to take the higher of the two payments, which you are stuck with for life.
What happens if you get remarried? Glad you asked – you then lose any benefit from your former spouse but are eligible to ride on your new spouse’s coattails, generally after one year. If you have been married two or more times, with each lasting 10 years, you will need to sit down and call us – the rules start to get crazy.
One other thing – you don’t have to wait for your ex to file to file yourself. You can file at age 62, but you give up the dual filing option we described earlier.
So what happens if your ex-spouse dies? From a social security perspective there are more options to consider. And again, the magic number is 10. If you were married for at least ten years, you are now eligible for divorced survivor benefits. Best of all, this benefit can be as much as 100% of what your late ex-spouse was due. You can file for this as early as age 60, or 50 if you are disabled. And listen up you senior lovebirds – if you remarry before age 60 you lose this eligibility unless the new marriage ends. But interestingly, if you remarry after 60, you can still file for the survivor benefit. And if you are receiving the divorced spousal benefit described earlier, the SSA will automatically switch you over to the higher paying survivor benefit. Thanks SSA!
Please keep in mind that Congress has tweaked the FRAs for people born after certain years. To find out what your full retirement age is, visit https://www.ssa.gov/planners/retire/agereduction.html.
Life always throws a few curves, and death does too. Keep these SSA rules in mind, and feel free to call us with any questions.