Dear Carrie: I'm divorced. I've heard that I might still be entitled to a Social Security benefit from my ex. How does that work? -- A Reader
Dear Reader: What you heard is correct. Even though you're divorced, it's still possible to collect benefits on an ex-spouse's Social Security record. However, the operative word here is possible because there are definite qualifications you must meet in order to do so. The basic qualifications are pretty straightforward, but there are a few permutations you'll need to be aware of to determine if and when collecting spousal benefits on your ex is the right move for you.
The first determination is the length of your marriage. You're entitled to collect on your ex's Social Security record if you were married for at least 10 years. Interestingly, it doesn't matter if he or she has remarried -- you're still in the picture benefits-wise.
For you, however, remarriage is an issue. In order to collect a divorced-spouse benefit, you must be unmarried. If you did remarry, that marriage must have ended by divorce, death or annulment. (You could then choose to collect on either spouse, whichever benefit is higher, but you can't collect on both.) Finally, you must be at least 62 years old.
It's also interesting to note that what you collect on your ex-spouse's earnings record won't have any effect on what your ex or his or her current spouse can collect.
That may all sound simple enough. But there's still more to think about.
If you meet the basic qualifications and the Social Security benefits you'd receive on your own earnings are less than the spousal benefit, it would make sense to file based on your ex's record. Even if he or she hasn't yet applied for Social Security but is eligible for it, you can still take benefits as long as you've been divorced for at least two years.
However, in terms of determining the best time for you to take this benefit, there are a couple of things to consider. A spousal benefit, whether you're married or divorced, is only 50 percent of the spouse's full benefit.
If you decide to take it at age 62 rather than wait until your full retirement age (66 for those born between 1943 and 1954), your 50 percent benefit will be permanently reduced by another 25 percent. Depending on your current financial situation, it might make more economic sense to wait.
There's yet another reason to consider waiting. At your full retirement age, if you're eligible for benefits on your own record, as well as that of your ex, you can choose to initially take only the divorced-spouse benefit and delay taking your own benefits until a later date.
Because benefits go up by about 8 percent a year between the ages of 66 and 70, waiting to collect your own benefits could mean a significantly higher payout down the road. Just for the record, the spousal benefit doesn't go up in the same way, so there's no advantage to waiting to collect it past your full retirement age.
The Difference in Survivor Benefits
The rules change a bit if your ex-spouse passes away. If you're 60 years old and you were married for 10 years or longer, you're entitled to 100 percent of your deceased ex-spouse's Social Security payout, the same as a widow or widower. And, once again, the fact that you collect benefits won't impact what anyone else can collect.
The rules regarding marital status are different in this case, as well. You can be married and still collect survivor benefits as long as you didn't remarry until age 60.
An Exception to the Length-of-Marriage Rule
There's one more exception to the rules governing survivor benefits. If you're caring for a child who is under age 16 (or disabled), and who is getting benefits on the record of your former spouse, you don't have to meet the length-of-marriage rule as long as the child is your ex-spouse's natural or legally adopted child.
However, in this situation, the benefit you receive will have an impact on the amount of benefits others might collect. If this is your situation, it's best to contact the Social Security Administration.
What's Right for You?
If you're divorced and juggling expenses, being able to boost your income with a spousal benefit can be a real plus. But no matter what your marital status, it pays to do some serious thinking about the best time for you to file. Your health, family longevity and overall retirement plan are all factors to consider. If you can wait a few years to collect, do so. It's like getting an extra return on your money.
Carrie Schwab-Pomerantz, CERTIFIED FINANCIAL PLANNER(tm), is president of Charles Schwab Foundation and author of "It Pays to Talk." You can e-mail Carrie at email@example.com. This column is no substitute for an individualized recommendation, tax, legal or personalized investment advice. To find out more about Carrie Schwab-Pomerantz and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
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