Divorce for the elderly: the impact on social security
10 year rule. Benefits are calculated based on the average monthly income of the covered person. A spouse can receive benefits based on his or her own employment record or that of the spouse. For a spouse who did not work or had low wages, the lower-earning spouse is entitled to up to half of the retired worker’s full benefit, referred to as the Basic Sum Insured (PIA). Eligible workers who are fully insured Social Security participants will receive the greater of their own PIA or 50% of their spouse’s benefit, whichever is greater.
Example: If Sally has a PIA calculated at $250 per month and her husband Jack has a PIA of $1,000 per month, then Sally is entitled to a benefit of $500 per month (or 50% of Jack’s higher PIA).
Divorced spouses who have been married for at least ten years are entitled to benefits based on the other spouse’s PIA.
To start receiving benefits, a person must be at least 62 years old and not remarried. If the ex-spouse remarries, benefits will be calculated and compared to the new spouse’s PIA. If that marriage ends in death or divorce, the former spouse can are eligible for PIA based on previous marriage.
The amount of benefits that the ex-spouse receives does not affect the benefits available to the other spouse.
Any spouse who is at least 62 years old and has been divorced for at least two years can start receiving benefits, even if they are not yet retired.
Examples:
Which of the following is eligible for retirement benefits under her first spouse’s Social Security retirement benefits provision?
A.) Helen, age 62, married from 1966 to 1980, whose ex-husband worked from 1963 to 1998. Helen divorced in 1995, never remarried, and her ex-husband is deceased.
B.) Jane, age 62, was married from 1969 to 1983. Her first husband was at work from 1963 to 2000. Jane has remarried, divorced, and remarried.
C.) Judy, age 63, was married from 1961 to 1990 to her first husband, who worked from 1968 to 2003. After divorcing, she remarried in 1993 to her second husband, who eventually account died in 2004
D.) Emily, age 60, was married to her first husband from 1963 to 1988. She remarried in 1994. Her husband worked from 1968 to 1998.
E.) Susan, age 68, was married from 1980 to 1988 to her first husband, who was employed from 1963 to 2003. She remarried and divorced her second husband after 6 years.
Based on these examples, only Helen (Example A) is eligible to receive benefits based on her first husband’s employment record. They were married for more than 10 years, divorced for at least 2 years, and eligible based on age (over 62).
Jane (Example B) is not eligible to collect on the basis of the first spouse because she is remarried.
Judy (Example C) can collect under her second husband.
Emily (Example D) is not yet eligible to collect because she is under 62.
Susan (Example E) is ineligible because she has been married for less than 10 years to both spouses. She will have to rely on her own employment record to calculate PIA.
For personalized help, you should consult with a qualified financial professional who has been trained to work in the specialty area of divorce financial planning, such as a CERTIFIED FINANCIAL PLANNER (TM) Specialist or a Certified Divorce Financial Analyst.
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