Article provided by Thomas M. Jeffrey, Senior Vice President, Investments for Troon Investment Advisors of Raymond James & Associates.
Smart ways to claim benefits after a divorce or the loss of a loved one
Social Security has been in place since 1935 and many rely on it to bolster their retirement resources. If you’re divorced or widowed, you may have extra options to boost your Social Security paycheck by strategically claiming spousal or survivor’s benefits.
Divorced spouse benefits
Many divorced women do not realize that they have the option to claim Social Security benefits on their former spouses’ work record. If you were to start receiving benefits at your full retirement age (FRA), your benefit as a divorced spouse could be equal to one-half of your ex-spouse’s full retirement amount (or disability benefit). This could prove to be even more advantageous when there is a significant difference between your incomes.
To claim that spousal benefit on your ex, there are some requirements you must meet:
1) have been married at least 10 years;
2) be unmarried;
3) be 62 or older;
4) be entitled to Social Security.
And if you’ve been divorced for at least two years, you can collect on your ex’s record regardless of whether or not he has applied for retirement benefits. This holds true even if he has remarried. And another thing: Your ex won’t know whether you have claimed a spousal benefit because the amount you receive has no effect on the benefits the worker and current spouse can receive.
If you have reached full retirement age and you are eligible for both a spouse’s benefit and your own retirement benefit, you have choices. One of which is to start receiving the divorced spouse’s benefits now but delay taking your own retirement benefits until a later date. This delay offers time for accrual of retirement credits providing higher benefits later.
Widows and widowers also have a right to file on their spouse’s record as survivors of the marriage. To claim survivor’s benefits, you must have been married to the deceased at the time of his or her death and for at least nine months prior, with a few exceptions. Divorced spouses also can receive survivor’s benefits, as long as your marriage lasted at least a decade and you haven’t remarried (exception: those who remarry after 60).
If you’re at FRA or older when you become a surviving spouse, you can claim 100% of the deceased’s basic benefit. Before then, you’ll receive a prorated amount.
If you begin collecting survivor’s benefits before reaching your full retirement age, you can switch and claim based on your personal record once you reach FRA, if that amount is greater.
Know your options
There’s no one-size-fits-all solution when it comes to Social Security and when to start drawing benefits. The benefits estimator at SSA.gov could serve as a good place to start; however, it’s important to talk to your advisor to determine how to maximize the benefits coming to you and whether it makes sense to apply for benefits on your ex-spouse’s work record.
The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete.