Don't Divorce Your Spousal Social Security

In my last article I wrote about why I chose to purse my CDFA®, and the benefits of having a CDFA® professional, working on your team through the divorce process. This time let’s look at a topic very rarely discussed as it relates to divorce, Social Security Benefits.

What is one of the most common questions you hear asked of a married couple?

How long have you been married?”  Oftentimes, you don’t have to ask people how long they have been married or were married, it’s just blurted out.  The emotional attachment to that number is obvious but there are important financial implications.  Here’s why.

Several weeks ago, I met with a recently divorced woman, I’ll call her Amber.  Amber works at a nearby business and came to us with many questions regarding her financial future which remained unanswered and even undiscovered.  We started the meeting by getting to know each other before diving into the deep end and started asking the undoubtedly uncomfortable post-divorce financial questions.  For most, these unanswered questions exacerbate the fear revolving around an uncertain financial future.  Amber’s case was no exception. 

Post-Divorce Social Security Planning

My team proceeded to take her financial inventory, basically everything she was awarded in the divorce settlement plus any other non-marital assets.  This information along with her future income potential, projected savings rate and Social Security was compiled to model her retirement income.  During our conversation, I asked the question…   “How long were you married?”  Amber replied, “19 years.”  I followed up with, “Do you know approximately how much your ex’s Social Security benefit will be?”  She answered, “The last statement I saw said about $3200/month at age 66.  Why?”  I said, “Your Social Security benefit is projected to be $810/month.  If you don’t remarry before 60, you are entitled to an ex-spouse benefit of $1600/month which is 50% of $3200.”  Amber was shocked.  She had not heard this before and it’s not the first time I’ve been met with that reaction. 

If you’ve been married for at least 10 years and divorced for at least 2 years, you are entitled to an ex-spouse Social Security benefit.  The benefit amount is equal to 50% of the ex-spouse’s Social Security benefit.  To be clear, this does not reduce the ex-spouse’s benefit.  In fact, the ex-spouse does not even need to know you intend to file on their Social Security record.  However, if you remarry before 60, your spousal benefits will be based on your new spouse’s Social Security earnings record. 

Pre-Divorce Social Security Planning

I’ve also heard stories of couples finalizing a divorce several months shy of 10 years.  Since the marriage didn’t last a full 10 years, neither ex-spouse can file a claim on the other’s Social Security record.  They divorced each other along with their Social Security spousal benefits.  The is particularly costly for the ex-spouse who stayed at home with the children and hasn’t paid into Social Security.  When possible, delaying the divorce until the 10-year mark is met almost always puts the lower wage earning ex-spouse in a much more favorable financial position without affecting the other.  If you can make it to the 10-year mark, you won’t divorce valuable Social Security ex-spouse benefits. 


I hope this helps. 

Chris Powers, CDFA®, CFP®


 [KMA1]Will link previous article here.