The first thing I always tell people is that this will have no impact at all on their former spouse’s benefits. In fact, the former spouse won’t even know that you are taking the benefit. They actually have the right to use the same strategy based on your record!
What people don’t realize is that if both spouses are working & are eligible for their own benefits, the spousal benefit remains.
As long as the individual was married for 10 years, has been divorced two years and is not currently married, that individual is eligible for a divorced spousal benefit based on their former spouse’s earnings record. The only catch: The former spouse needs to be age 62 or older when the divorced individual files for spousal benefits.
We frequently recommend that our clients wait until their full retirement age (age 66–67) before they file an application for divorced spousal benefits, thereby delaying their own benefits to age 70, allowing their own benefits to increase by 8% per year. Again, you are paid a spousal benefit for a few years while your benefit maxes out at age 70.
You must wait until your full retirement age for this strategy to work. If you file early, you are deemed to have applied for both simultaneously.
The Widowed Applicant
The same strategy applies in the case of survivor benefits. If your spouse is deceased and you were married at least nine months (except in the case of an accident), you may claim survivor benefits separately from your own personal retirement benefits. The rules are a little different for a widow or widower, but our most frequent advice is similar to that in the prior two scenarios: We usually recommend the individual claim survivor benefits at full retirement age and then their own benefits at age 70. Again, you are getting paid while waiting for your own benefits to max out.
Final Thoughts
As of 10/29/2015, a budget bill has passed the House and Senate that will make significant changes to the strategies discussed in this article. Until this is resolved, please use great care making decisions regarding your benefits. These three scenarios are presented to make you aware of Social Security claiming strategies that are currently available and frequently missed. They are not intended to serve as personal advice. The goal of the article is to help you realize that there may be more money in the system for you than you thought. Many nuances and individual circumstances will determine what may be the right strategy for you. Contact a financial planner or a Social Security office to see how the rules may affect you.
