Get What's Yours: The Secrets to Maxing Out Your Social Security was written by an economist and two journalists. Laurence Kotlikoff (@Kotlikoff), an economist at Boston College, writes broadly about Social Security, including a weekly column called "Ask Larry," which appears online at the PBS NewsHour, where his friend, co-author and long-time economics correspondent Paul Solman (@PaulSolman), works. The third author, journalist and aging expert Philip Moeller (@PhilMoeller), writes about Social Security for Money Magazine. Out now from sister company Simon & Schuster, Get What's Yours is available wherever books are sold. Visit GetWhatsYours.org for more.
By Philip Moeller, special to CBS Local
Divorces, while unfortunately common, seldom lead to light-hearted thoughts or perhaps any thoughts at all about what the end of a marriage means for Social Security benefits. But we're here to tell you, after answering lots and lots of people's questions, that far too many folks didn't have a clue that such benefits even existed, let alone how generous they could be. Here are some of the Social Security secrets you need to know about cutting the marital knot.
Related: How To Max Out Your Social Security
What Are The Basics?
After being married to someone for at least 10 years, you may qualify for a divorce or, in Social Security geekspeak, an ex-spousal benefit based on your former spouse's Social Security earnings record. To do so, both of you must be at least 62 years old, and your former spouse either has to have already filed for his or her retirement benefit, or you have to have been divorced for at least two years. However, if you remarry, you are not eligible for an ex-spousal benefit. In the silver lining department (and we're not suggesting let alone advocating mayhem), you can remarry after age 60 and still be qualified to file for a survivor's benefit when your ex-spouse dies.
How Much Can I Get?
The maximum ex-spousal benefit is half of the other spouse's "full" Social Security benefit. This is not necessarily the benefit he or she actually winds up receiving. Instead, inside Social Security's bag of arcane rules is one that says a full retirement benefit is the amount a person is entitled to receive when they reach what the Social Security Administration calls Full Retirement Age (FRA). This is 66 now and scheduled to rise to 67 for anyone born in 1960 or later. In order to get the top benefit, you must wait until your own FRA to file for the benefit. You can file as early as age 62 but you will be hit with stiff early claiming penalties of up to 30 percent of that 50 percent. So, instead of getting half of your ex-spouse's full benefit, you'll get only 35 percent of it.
How Do I Find Out How Much The Benefit Will Be?
Unfortunately, finding out what you ex-spouse's full retirement benefit will be may be really hard. If you apply for the benefit, the Social Security Administration will look up your ex's earnings records and tell you what your benefit would be. But Social Security is not required to give you this information ahead of time. So, good luck trying to build an informed plan for how to collect the best possible mix of Social Security benefits.
When Are Two Divorcés Better Than One Married Couple?
Only one married spouse can collect a full spousal benefit while allowing their own retirement benefit to grow by 8 percent a year between ages 66 and 70. But if that same couple were to be divorced, and neither of them had yet filed for their own retirement benefit, each of them could, at their FRAs, take a full ex-spousal benefit based on their ex-spouse's earnings record. Heck, this is such a good deal (and known by virtually no one) that it might be enough to get the couple thinking about getting back together. Of course, they would have to live in sin or lose this marvelous divorce consolation prize.
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