A Wiser Retirement®

280. The Ex-Factor: Your Social Security Rights After Divorce

• Wiser Wealth Management • Episode 280

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Divorce can bring significant financial changes, but many overlook how Social Security benefits fit into their post-divorce financial strategy. In this episode of A Wiser Retirement® Podcast, we discuss several misconceptions about claiming these benefits. Understanding the rules can make a substantial difference in long-term financial stability. 

Related Podcast Episodes:
- Ep 160: How Finances Affect Divorce
- Ep 222: When should I claim Social Security if I don’t need it?

Related YouTube Videos:
- Common Mistakes to Avoid with Social Security Spousal Benefits
- How Much is Social Security Reduced if I Have a Pension?
- Unretirement: How Returning to Work Affects Your Social Security Benefits

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- About Wiser Wealth Management
- Schedule a Complimentary Consultation: Discover how we can help you achieve financial freedom.
- Access Our Free Guides: Gain valuable insights on building a financial legacy, the importance of a financial advisor for business owners, post-divorce financial planning, and more!

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This podcast was produced by Wiser Wealth Management. Thanks for listening!

Speaker 1

Because how embarrassing would that be? It's like, is he going to know, he or she going to know that I'm taking their benefit? Yeah, exactly yes.

Speaker 2

And I think that's such a common misconception of the whole process. I feel like so often people think that their ex-spouse has to find out that you're claiming on their benefit and there's no necessary reason for that at all.

Speaker 1

Welcome to Wiser Retirement Podcast. Are you curious about your Social Security benefits if you're divorced? I'm Shawna Theriault and today I'm joined by financial advisor Michaela Dowdy. Each week, we bring you practical advice on retirement, investing and planning for your financial future. Don't forget to subscribe to the podcast wherever you're listening. Let's get started. So we are debuting from our new podcast room, which is really, really exciting.

Speaker 2

It is exciting. I'm shocked that we're getting to be the two that are allowed to have this special moment.

Speaker 1

And we've never done a podcast together. No, we haven't. So it's the two girls in the new podcast room and it's a soundproof room.

Speaker 1

So they closed the door and I was like wait, are they locking us in here because we're not allowed to leave? I'm a little claustrophobic and I'm like, wait, are we locked? It's like those escape rooms you can't get out of. But even though you can, I'm like you better make sure you don't actually lock the door, because then it would not be good no, trapped, and they're gonna send us codes and we're just gonna have to figure it all out.

Speaker 2

It's like being stuck in an elevator, right? No, exactly, um, yeah, no, all of the elevators at my apartment were down this morning because they're taking all the power out at my apartment to do some repairs. Oh so I had 19 flights of stairs to go down this morning.

Speaker 1

Well, you're not even sweaty or anything. Right, you got your workout in for the day I did. Now you don't have to go to bar.

Speaker 2

Exactly no more bar workout classes today 19 flights 19 flights of stairs.

Speaker 1

Was your dog home this morning?

Speaker 2

Yes, so, thankfully though, they hadn't turned off the power before I took her out, so I took her out at like six o'clock this morning, so she was okay. Oh gosh, that would be a lot of stairs up and down. It would have been no, but thank goodness everything was okay. But just the going down, all those flights was not ideal. This morning. But down's better than up it is. It is Absolutely. I'll really get a workout. You had to carry all your bags, all your bags and your computer.

Speaker 1

Oh gosh. Well, workout queen, there you go, you're healthy and in shape, right, I know, right, right. Well, today we're going to be talking about social security and divorce, and so that's one of the things when someone's getting divorced that you don't think about, and it's not really something you negotiate in the divorce, because it's really has a lot of different rules surrounding it, and I don't know that we'll cover every single situation today, because it's just so many we were talking about that.

Speaker 1

It's like, well, what if this and what if this? And you know there's so many different situations. But it's just one of those things you don't think about when you're getting divorced, because I mean, really, when you're married, you know, when you start taking Social Security, you can either take yours or half of your spouse's, depending on whichever is higher. And so it's like, well, what happens if I'm divorced? It's like I didn't plan for that potentially and again, it's nothing you can negotiate in the divorce decree or anything, because it's really a matter of different factors which we'll go through, but it's just something to be aware of. So, if you're divorced, what the situation is, and so so what are the rules surrounding? You know, divorce and Social Security, just the general ages and all of that.

Speaker 2

Yes, so essentially, if you're married longer than 10 years, that's where you have the ability to then start claiming potentially on your ex spouse's benefit. So that is the big number. Is that 10 year number? To be married for that long, then you'll have access to their benefit, um, so maybe make it last, another year.

Speaker 1

If you're going nine, right, no, don't do social security planning with a divorce, but it might be, you know, I mean it could be a little a little bit, depending on the situation definitely alive.

Speaker 3

a husband and a wife, yeah.

Speaker 2

No, it could be beneficial either way. Right, of course, yeah.

Speaker 1

So it's 10 years. But then you know obviously Social Security rules you have to be at least 62 to claim Social Security.

Speaker 2

Exactly.

Speaker 1

Still either way, unless you're disabled. That's a little bit different, but generally 62. And so then would you get the same rules of theirs or yours, or what? How does that work?

Speaker 2

yes, so essentially you're entitled to 50 of their benefit. Okay, um, but you're having to wait, um, as long as you're age. 62 or older is then when you can start claiming on their benefit. So you do have to be at your retirement age or Social Security claiming age, at least for yourself. Of course, 62 is not full retirement age, so full retirement age is different, and that could vary 66, 67, just depending on your own age. But that's something that you do want to keep in mind, because you still won't have their full benefit necessarily either at that point, because you still won't have their full benefit necessarily either at that point. So just making sure you're claiming at that point, but then also you have to currently be unmarried, is a big proponent of that which is huge, yeah, so that's just a big consideration there as well.

Speaker 2

So not only do you have to have been married for 10 years, but then you also have to be age 62 or older, of course, to be looking at this, but then also currently unmarried, not remarried, so you haven't remarried either, um, and so that's a big, that's a big proponent that we see as being, um, not I don't want to call it an issue, because also, if you found that special someone, right you know, get remarried to you and that's so special, um, so it's not necessarily it doesn't really matter about the money and it doesn't matter at that point, but it is something just to consider and to know that if there is a difference there, then you wouldn't likely have the access to that benefit any longer.

Widow Benefits vs. Ex-Spouse Benefits

Speaker 1

Well, and really when we're doing planning for individuals whether they're married, not married, divorced it's really what makes sense from taking Social Security in general. So you know it's still going to be a factor of how long are you going to live. So your, your benefit will still grow. Your personal benefit will still grow beyond age 62 to full retirement age. Most full retirement age is 67. And then you max out at 70. Right, and so after that you just take it, and so it's really based on how long are you going to live. So the calculation there is not necessarily different. It's just what's better. Is your benefit better, or maybe half of your ex spouse's benefit? And so it's really a matter of you know the long.

Speaker 1

Usually the break even is around age 78, where we see it makes sense to wait till age 70 to take your benefit later, and so that's not really going to change when we're looking in terms of planning. And so you know that makes sense to wait. But if there's any health issues or anything like that, then you know maybe we look at taking it a little bit earlier than that or other factors. You know assets, income, you know other factors, if it's really slim, and so just trying to maximize what you're getting there. The good news is is that you know your ex spouse doesn't have to know or even approve it. Yes, because how embarrassing would that be? It's like is he going to know? He?

Speaker 2

or she going to know that I'm taking their benefit. Yeah, exactly, misconception of the whole process. I feel like so often people think that their ex-spouse has to find out that you're claiming on their benefit and there's no necessary reason for that at all. Yeah, Even if it's something like it's interesting kind of how the system works and I'm going to talk a little bit in stereotypes of you know, a husband can have multiple wives and if he's married to those multiple wives for 10 years each, all of them can claim on his benefit.

Speaker 1

And it doesn't reduce the benefit, and it doesn't reduce anybody's.

Speaker 2

It doesn't reduce his. It's so fascinating.

Speaker 1

We think that that's adding to the issue of the social security. I guess not if it's claiming theirs or theirs. So maybe it's a little bit of a difference. It's not the full amount right, maybe not, but it is fascinating.

Speaker 2

when I found out that fact a few years ago, I was like wow, you can just have as many and they all have claiming status, but there's only so many 10 year periods in your life where you can work and not you know.

Speaker 1

so there can't be that many Exactly. Exactly Because you can't have multiple at one time True, very true, at least to my knowledge.

Speaker 2

For social security purposes? I don't think so, Probably not.

Speaker 1

Exactly so. It's still only so many 10-year periods in your lifetime where you could have to do that.

Remarriage Rules and Benefit Implications

Speaker 2

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Speaker 1

Also. So, looking at there's differences, if your ex-spouse is alive or deceased, so you could be a widow, or it could be that your ex-spouse passed away after you divorced too, so it may not be that you were a widow and then got remarried, or are you know? It's really. There's a difference where it's, um, your ex-spouse says in divorce and then they pass away, yes, because then the rules change a little bit if they're passed away. Yeah, so it's, your ex-spouse says in divorce and then they pass away, because then the rules change a little bit if they're passed away.

Speaker 1

So, it's not half their benefit. It's then the full benefit, right?

Speaker 2

So you're going to claim that full spousal benefit at that point for a deceased spouse? So you're going to get that full, 100% benefit.

Speaker 1

The widow benefit. The widow benefit Exactly.

Speaker 2

Instead of having a half benefit. That would be if you're just claiming on an ex-spousal benefit.

Speaker 1

And so you know, I have seen situations before where you know maybe your ex-husband or wife passed away and so you're claiming that spouse or not spouse. I guess it would be the widow benefit at that point and then letting your own build and then claiming your own at age 70.

Speaker 2

Which is a great strategy to work with, not that you would wish at that point for anything to have happened to your spouse or anything like that Most of us don't wish the exes have something happen. No, exactly don't wish the exes have something Exactly Right. So that's something where that does tend to be a silver lining in that is that you do get to allow your benefit to grow, while you're at least getting to have some of that supplemental come in from the widow or benefit.

Speaker 1

So you can switch to the spousal after the ex. So let's say you, okay. So let's say you're remarried. So there's a rule surrounding that where if you are over age 62, I believe it is so if you get remarried before that age, then you don't get either benefit you don't get the ex-spousal benefit or, if they pass away, the decedent. If you get remarried Now, if that second marriage ends in divorce or death or annulment, then you could potentially reclaim on your ex-spouse again, either the widow or the spousal. So it's kind of confusing there. If you're over that age then and you get remarried, then you can still claim on your ex spouse if it's higher, if they are passed away. So there's that weird nuance where if you get remarried after that certain age, if you get remarried, then you can potentially claim on your ex spouse if they're passed away, but if they're still alive you can't Exactly.

Speaker 2

So it's where the situations get so tricky it is, and that's where you really just have to dive into all of these rules and what all is happening, because even we were having to do research on exactly what happens in all of these different situations because we haven't seen all those. I don't know that I have seen all those. I don't think so. I don't know if I've seen that one either. Yeah, no.

Speaker 1

Or you're like remarried. I have seen one situation where remarried, after that certain age, still claiming on ex-spouse that has passed away as a widow benefit and letting theirs build even though they're still remarried yes. Benefit in letting theirs build even though they're still remarried yes, so you didn't preclude yourself from that because you were over that threshold and you know. I mean, I think it makes sense they're they're just making sure that if you need to draw from someone that had passed and you get remarried, that you're not. You know, in the case of a widow, exactly.

Speaker 2

You know that you're not penalized in that. No, because I mean that's just a heartbreaking thing to go through, whether it's an ex spouse or you know it's a situation that you got divorced after the facts, you could get remarried, you know, from your spouse, and so that's just something that it can be really difficult to balance that, and I mean even if they're an ex.

Speaker 1

It could be like the parent of your children Exactly when they lost their parents. So in the whole situation is just really, really sad. For sure, definitely so. There's so many nuances around that.

Speaker 2

And while we're talking about just the widower benefit and allowing your own benefit to grow, it is just important to know that if you were to claim just the spousal benefits and not widower benefit so your spouse is not or your ex spouse is not deceased your benefits not going to continue to grow if you claim on the ex-spouse benefit.

Speaker 1

Okay, okay, so yours is not going to continue to grow. Yes, Okay, oh, interesting, but it does if you're a widow, yes, Wow, okay.

Speaker 2

So it's like the, not the benefit, but it's like one of the silver linings to that widower. So yes, if you're claiming on your ex-spouse's record, you're not going to get those delayed retirement credits going to your own benefit, got it? But it's only 50 percent of theirs, correct.

Speaker 1

So really, if you made you know any kind of decent money, then it's still probably better to take yours eventually and let yours build. Yeah Right, because otherwise half of his it just depends on what it is.

Speaker 3

Yeah.

Speaker 1

But you can always set up an appointment with Social Security office and talk about that. Even if it is your ex spouse, they're going to see that you were tied together at some point and talk about that. So you can ask all those questions, yes, and try to figure that out. And there are. I have seen online there's actually calculators on the Social Security website. So if you go to SSAgov, make sure it's gov.

Planning Strategies and Resources

Speaker 1

You can log into your account. But also there's other calculators that you can just play with and say what ifs. So that's very, very helpful so you can look at different you know projections in terms of you know widow versus ex-spouse, etc. So there's different calculators you can look at there. Definitely, the bottom line is is that you want to look at this with your overall financial plan and really look at all of your options to see what is best. And again, I don't know that I would do social security planning necessary around your divorce or marriage and new marriage. But maybe I mean you may want to take that into consideration if it's going to be a huge difference.

Speaker 1

The timing does matter. Sometimes you don't want to make those kind of decisions based on the financial, but it does absolutely matter. But just knowing too that you don't have to know all the rules of it and they all could change. That's the thing. All of these change all the time. But just you know if you are going through a divorce, just know that when you're running plans or working with an advisor, that there are different options there, just depending on your overall situation. So you know, don't want you to think that and again, you can't, you can't really plan for that in the divorce decree, but really the timing is really important, the strategy of it and just looking on what's what's the best for you, and sometimes we have to make decisions based on what we know today, even though things could change. And you know if it works with your overall plan and it still looks good for the long run, then you know, taking that into consideration and just knowing what the numbers are, so, so important exactly.

Speaker 2

I mean that's just. Social security is just a vital part, I feel like, to anyone's plan, no matter what, even if you have a larger net worth and overall, just a state in general to pull from your portfolio, anything like that still, social security tends to be a very vital point of that picture and the success of your plan. So you definitely want to make sure you're making the right decisions for you and your family and whoever, whether you get married again or not, I'm just making sure that you have the right decisions there being made.

Speaker 1

Absolutely, absolutely OK. Well, I think that wraps it up. I think you're going to go through a couple other podcasts we have, potentially in some other educational videos.

Speaker 2

Yes, so essentially, what we have is multiple different podcast episodes, so related to this one, though, is episode 160 of how finances affect divorce. There's also episode 222, which is when should I claim Social Security if I don't need it, which is when should I claim social security if I don't need it. And then related financial education videos is unretirement how returning to work affects your social security benefits. Another one is how much is social security reduced if I have a pension? And then the last one is common mistakes to avoid with social security spousal benefits. So just something to look at there. We've also linked the social security calculator as well that Shauna was referencing, so that'll be linked in the show notes as well. But thanks for listening to today's episode. If you're interested in learning more about Wiser Wealth Management or want to schedule a consultation to meet one of our fiduciary financial advisors, head to wiserinvestorcom or click the link in the episode notes. See you next week.

Episode Wrap-Up and Additional Resources

Speaker 3

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Speaker 3

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