When it comes to divorce, there are a couple of basic rules to remember when thinking about Social Security benefits.
First, if an individual was married for at least a decade to their spouse, then divorced, they are eligible to collect spousal benefits for as long as the beneficiary recipient is single. The recipient can continue to collect even if the ex-spouse remarries.
If both ex-spouses are at least 62 years old and divorced for at least two years, one ex-spouse is entitled to claim benefits based on the other’s earnings, even if the other spouse hasn’t filed yet. Additionally, there are instances where one ex-spouse can claim a spousal benefit equal to 50% of the other spouse’s full retirement benefit while postponing their own and allowing it to grow by a certain percentage annually to the maximum at age 70.
Suppose a spouse was born before January 2, 1954, and has already reached full retirement age. In that case, he or she can elect to receive only the divorced spouse’s benefit and delay receiving their own retirement benefit until a later date.
Can Benefits be Controlled Through a Divorce Settlement?
According to the AARP, the short answer is no.
You can still qualify for that divorced spouse’s benefit as long as you meet the stipulations outlined above. Your ex-spouse can’t prevent you from receiving that benefit, but Social Security won’t pay if your own personal retirement benefit is valued at a higher number. If you qualify for two types of benefits, Social Security will pay whichever is higher.
You could potentially protect the long-term value of the divorced spouse benefit through a prenup as well. The main thing to consider with any divorce negotiation is that the more assets you retain or receive through the split, the bigger the tax liability you may have later. This is important to consider when thinking about your total income picture, including the taxable nature of Social Security benefits.
What About Other Retirement Vehicles?
Things continue to get complicated with older couples who may have multiple IRAs, 401(k)s, or other retirement investments. These vehicles are often split within a divorce, but the nature of that split can depend on which is valued higher or if one party physically owns more retirement investments than the other. Mississippi is an “equitable distribution” state, meaning that assets are split in a way that’s deemed fair, but not necessarily equal. This means you could end up losing more assets than you planned during the split.
Older couples with established retirement and Social Security considerations add to the divorce negotiation and settlement process complexities. This is why it’s important to have a qualified divorce attorney on your side. Call The Law Offices of Rusty Williard today at (601) 824-9797 to learn how we’ve helped Brandon and Jackson spouses through divorces.