A little known fact is that Social Security offers ex-spouses two valuable benefit claiming options not available to spouses. These advantages can be worth thousands of dollars to a person who meets Social Security’s definition of a divorced person eligible for ex-spouse benefits.
To illustrate these advantages, we’ll consider a simple example. Suppose Burt is married to Karen. Previously, he was married to Doris who has not remarried. All of them will be turning 62 soon. Burt’s benefit at his full retirement age (FRA) of 66 is $2,000 a month. Karen and Doris happen to have the same retirement benefits at their FRAs, namely, $400 a month. Burt plans to claim his retirement benefits when he turns 66. Let’s turn now to the advantages offered divorced persons.
First, Karen (the spouse) cannot claim spouse benefits on Burt’s record until he claims his own benefit at 66. In contrast, Doris (the ex-spouse) can claim ex-spouse benefits as early as age 62, even though Burt has not claimed retirement benefits. Suppose both Karen and Doris claim their own retirement benefits at age 62, receiving reduced retirement benefits of $300 a month (75% of their FRA amount). In addition Doris can claim early spousal benefits. If she had no benefits of her own, the spousal benefit would equal $700 a month (70% of $1,000). But she has $300 a month in retirement benefits, so she gets only $420 a month in ex-spouse benefits. Doris, the ex-spouse, gets an extra $5,040 a year for 4 years (or a total of $20,160), that is not available to Karen.
Second, since Karen is currently married she cannot claim spousal benefits on the earnings record of any previous ex-husband. In contrast, Doris–who has not remarried–can pick and choose among previous husbands, provided she was married for 10 years or more to each one. For example, suppose Doris was previously married to John for 12 years. John’s retirement benefit at his full retirement age is $2400. In this case, Doris should claim spouse benefits on John’s earnings record, since Burt’s full retirement amount is only $2,000. If she claims spouse benefits at age 62 on John’s record, she would get $860 a month in benefits (retirement and spousal combined).
This favorable financial treatment of ex-spouses, relative to spouses, has a surprising unintended consequence. It sets up an incentive for some couples to divorce so that they can take advantage of that favorable treatment. The SSA is not oblivious to this situation. It requires that a person be divorced for at least two years before he or she can qualify for ex-spousal benefits.
You can learn more about benefits for ex-spouses by checking out the divorced-persons page on our main website.