Social Security Myth #5: You Only Receive A Spousal Benefit If You Are Married When You Retire

October 22, 2014

In my last blog post, I addressed the myth that Social Security benefits are based on an accumulation of assets and that collecting a spousal benefit would reduce the amount a spouse would otherwise be eligible to receive. This brings up another myth that is circulating out there that suggests that one has to be married in order to collect a spousal benefit. That is not the case.

If you were married for ten or more years and have been divorced for at least two years, you are eligible for something called a divorced spousal benefit. Divorced spousal benefits work similarly to regular spousal benefits in that if you qualify for a divorced spousal benefit you may be eligible to collect a benefit equal to up to one-half of your ex-spouse’s full retirement benefit. However, if you earned enough credits to be eligible for your own retirement benefit, you will receive the higher of the two.

That being said, if you qualify for a divorced spousal benefit and a personal retirement benefit AND you wait until you reach your full retirement age before you begin collecting a benefit, you can apply the “collect now and later” strategy. With this strategy, you would claim your divorced spousal benefit first and then switch to your personal retirement benefit later, typically when it maxes out at age 70. Let’s look at an example:

Let’s say you and your ex are both eligible for a $1,500 monthly benefit when each of you reaches your full retirement age of 66. At age 66, you can begin to collect $750 a month in divorced spousal benefits while letting your personal retirement benefit grow at roughly 8% a year. Then, once you reach age 70, you can switch to your personal retirement benefit, now worth about $2,040 a month.

If you were married more than once for ten or more years, you have the option to choose whichever spousal benefit is higher. So building on the example above, let’s say that ex #1 has a $1,500 a month benefit while ex #2 has a $1,700 a month benefit. In this case, you would elect a divorced spousal benefit of $850 a month based on ex #2’s benefit.

You do not have to wait until your ex-spouse begins to collect a benefit. As long as your ex is age 62 or older, you can begin to collect a divorced spousal benefit. In this sense, it’s actually more advantageous than collecting a spousal benefit from a current spouse since they would have to apply for benefits first.

Lastly and most importantly, if you ever get remarried, you lose the right to claim a divorced spousal benefit. You will, however, become eligible for a new spousal benefit based on your current spouse’s benefits after one year of marriage. If you would like to learn more about collecting Social Security benefits on an ex-spouse’s record, visit http://www.ssa.gov/retire2/divspouse.htm.