It’s always difficult to go through a divorce. These difficulties can be more pronounced if you are approaching retirement. Going through a divorce in the years before retirement can have a substantial impact on your financial future, especially if you are the lesser-earning spouse or if your spouse handled the finances.
You may not have the same level of personal savings as your spouse. You also may not know where all the assets are held, making it difficult to negotiate a fair settlement. If you paused your career to raise children or to support your spouse’s career needs, you might not have a deep earnings record. That could impact your Social Security benefits, only compounding an already difficult situation.
Fortunately, Social Security recognizes this challenge. That’s why the Social Security Administration offers relief options to divorcees who had been counting on their ex-spouse’s retirement benefits.
Social Security Options for Divorcees
As a divorced filer for Social Security, you have two benefit options. One is to file for your own benefit. Given all the challenges mentioned above, that strategy may be less than ideal. With limited work history or a low level of earnings, your benefit may be modest.
The other option is to file for a spousal benefit based on your ex-spouse’s work and earnings history. As long as you meet a few qualification criteria, you can still take a spousal benefit even if you’re divorced.
The first criterion is that you cannot currently be married. Also, the marriage for which you are filing a spousal claim must have lasted at least 10 years. Finally, you and your former spouse must be at least 62 years old and eligible for benefits.1
Your filing for spousal benefits doesn’t impact your ex-spouse’s benefit in any way. In fact, you can file even if he or she hasn’t. If he or she has remarried, you can still claim your spousal benefit as long as you meet all other criteria.
Your Social Security filing is one of the most important decisions you will face in retirement. It’s a permanent decision. If you file for the wrong type of benefit, there’s no way to change it later. Also, if you file too early, you may see a decrease in benefits. Again, there’s no way to change the decision after the fact.
Not sure how or when to file for Social Security benefits? Unsure of how your divorce will impact your retirement? Let’s talk about it. Contact us at Baacke Insurance Services today. We can help you evaluate your objectives and needs and develop a strategy. Let’s connect soon and start the conversation.
This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
The material is not intended to be legal or tax advice. The insurance agent can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. The insurance agent may be able to identify potential retirement income gaps and may introduce insurance products, such as an annuity, as a potential solution. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit www.ssa.gov
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