How Divorce Affects Your Social Security
From legal fees to your living situation, splitting up with your spouse presents the need to reevaluate all aspects of your finances. Your retirement is no exception. Whether you’ve planned to stop working in the next few months or your retirement plans are decades away, it’s important to understand how divorce can impact all aspects of your retirement—especially social security benefits.
Even if you don’t currently receive social security benefits, it’s still worth taking the time to consider your social security before making a final decision to file for divorce.
While this is in part because the length of your marriage determines your right to receive social security based on your ex-spouse’s work history, it’s also important to consider your situation holistically. The more you understand how your monthly benefit could be affected, the more equipped you’ll be to navigate your finances strategically post-divorce.
How social security benefits are affected by divorce
Many divorcing couples are surprised to learn that the decision to award spousal benefits doesn’t rest in the court’s hands—it belongs to the Social Security Administration (SSA). In fact, social security benefits aren’t considered marital property or subject to equitable distribution.
Federal law states that social security benefits are not “assignable, transferable, or subject to the legal process” and that they aren’t subject to “execution, levy, attachment, garnishment, or other legal process or to operation of law.”
In other words, New Jersey’s family court system isn’t authorized to transfer one person’s social security benefits to another person as part of a divorce settlement.
However, it may still be possible to receive benefits based on your ex-spouse’s work record. The final decision simply rests in the hands of the SSA, rather than the court.
Understanding divorce and social security
The divorce process involves many important decisions, and it’s easy to feel like you have to make a choice about some things today—but deciding what to do about social security isn’t one of them. Until you or your spouse reaches the age of retirement, there’s no need to file any paperwork.
That said, consulting with a trusted financial advisor and a skilled family law attorney is an important step to take before making any final decisions about your divorce or retirement.
Can you claim benefits on your ex-spouse’s work record?
Have you earned significantly less money than your ex-spouse over the course of your lifetime?
If you took time off of work to care for children or elderly adults, for example, your ex-spouse’s monthly benefit could be substantially higher than yours. However, you may be entitled to receive a monthly benefit based on your ex-spouse’s work history, even if they have since remarried.
To qualify for benefits based on your ex-spouse’s record, the following conditions must apply:
- The marriage was 10 years or longer
- Your ex-spouse is aged 62 or older
- Your ex-spouse is entitled to social security benefits
- You’re also entitled to social security retirement or disability benefits
- Your ex-spouse’s monthly benefit is higher than the monthly benefit you would receive based on your own work history
Because social security is an opt-in program, you will only receive the benefits you’re entitled to receive if you apply for them.
What if my ex-spouse hasn’t applied for social security?
If your ex-spouse hasn’t applied yet, you could still receive benefits as long as you’ve been divorced for at least two years.
Will my ex-spouse know if I collect benefits?
The SSA won’t notify your ex-spouse if you’re claiming benefits based on their work history. Your ex-spouse’s monthly benefit won’t be reduced, either.
Several additional factors affect social security benefit distribution for divorced couples:
- If you were born before Jan 2, 1954, special circumstances could apply. You may be able to claim your ex-spouse’s benefit, as well as your own.
- If you’ve been married more than once, you can only collect benefits from one person’s work record.
Survivor’s benefits after a divorce
If you already receive benefits and your ex-spouse passes away, the SSA will automatically switch your benefits to survivor’s benefits upon receiving proof of your ex-spouse’s death.
If you were not receiving benefits when your ex-spouse died, you can still apply for them as long as:
- Your marriage lasted 10 years or longer
- You didn’t remarry prior to age 60 (or age 50, if you have a disability).
Note that there may be some exceptions to these limits if you and your ex-spouse share a child who is disabled or under the age of 16.
Social security and divorce later in life
Regardless of whether you’re divorcing, discussions about money can become complicated when retirement is looming. Fortunately, the topic of social security can be resolved amicably, because there are no major decisions to make about it at the time of separation.
Even if your spouse collects benefits on your work record in the future, your own benefits—and the benefits your new spouse may be entitled to—won’t be affected.
Both retirement planning and divorce can be confusing, with many nuances to consider. Our compassionate and capable team is here to provide clarity and help you plan for your financial future after divorce.
Contact us now to schedule your free consultation.