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How Divorce Affects Retirement Planning and Social Security Claims

By Nottage and Ward on March 25, 2011

A recent article in The Los Angeles Times discussed the affect divorce and re-marrying can have on retirement planning and claiming Social Security benefits. For 72 percent of retirees that are unmarried, many due to divorce, Social Security is the primary source of income. Understanding the basics of spousal and survival benefits can help those who are divorced avoid making costly errors.

Someone who was married for at least 10 years to another who was paying into the Social Security system is entitled to spousal benefits, even if they are now divorced and do not pay into the system. Typically, if spousal benefits are claimed at retirement, they amount to about 50 percent of the wage-earner’s full benefits. It is important to note that, if these benefits are claimed early, the amount is reduced. However, if someone also paid into the system individually, they may also be entitled to benefits based on their own work record. In this case, they must choose which benefits to claim, individual or spousal; to claim both is not possible.

If someone remarries before turning 60, they lose their ability to claim spousal or survivor benefits based upon their former spouse. If they remarry after 60, they retain their rights to spousal and survivor benefits based upon their former spouse’s record for the rest of their life.

If someone is single but has been married to more than one person for over 10 years each, they may be eligible for spousal benefits based upon each former spouse’s earnings records. Although they cannot add all of the benefits together, they can choose the benefit which is best.

If someone has been married to more than one person for over 10 years each and their second spouse dies before the person claims their Social Security benefits, they are entitled to choose their former spouse’s spousal benefits or their deceased spouse’s survivor benefits. Oftentimes survival benefits are more generous since they are 100 percent of a working person’s entitlement, while spousal benefits are only 50 percent.

There are many things a person who is facing divorce in Illinois has to consider, including child custody issues, property division, maintenance, and Social Security benefits. To learn more about how to effectively plan for your future following a divorce, contact the Chicago retirement account divorce attorneys at Nottage and Ward today.