How Does Divorce Affect Your Social Security?

Posted on May 24, 2023

Dear Matt,

I need some advice. My first marriage lasted 12 years. After putting my husband through college and getting the kids raised where they were old enough to go to school, it was supposed to be my turn to finish my degree.

Well, that didn’t work out. He left me for another woman and took no responsibility for his children, even though he has a good job in the IT field. I worked a lot of low-paying jobs over the years to raise the kids on my own and I did a good job of it. We didn’t have much, but they knew they were loved and wanted. They’re grown up now and I work part-time and babysit my grandchildren two or three days a week.

Five years ago I met a wonderful man named Jeff on a dating app. We are both divorced and in our late 50s, and we are reluctant to jump into marriage again. But lately, he has been talking about it. I told him we need to talk to someone first because I heard about a couple who lost a lot of money in their retirement when they got married.

What can you tell me to help us make a good decision that won’t turn around and bite us later?

Thanks,
Melinda

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Hi Melinda,

You sound like a strong woman, having recovered from a painful betrayal and doing what you needed to do to provide for your kids physically and emotionally. My hat is off to you! I’m glad that at this stage of your life, you have found love again. You are still both young enough to make decades of happy memories!

For your situation, I’d like to share some advice about your planned retirement age and whose earnings history your retirement benefits will be based on.

When Should You Retire?

One of the most important decisions to be made about your retirement is when to retire. You can start drawing Social Security benefits as early as age 62 or as late as age 70. For people born in 1960 or later, the full retirement age is 67.

If you wait until full retirement age to claim benefits, you will receive 100% of the benefit amount you have earned. If you retire early, your monthly benefits will be reduced, and if you wait one or more years after full retirement age to claim benefits, your monthly checks will include a bonus, giving you more than 100% of what you have earned.

Whose Income to Claim?

A second important consideration for you is whose income to use as the basis to calculate your Social Security benefits. In your situation, you potentially have three choices:

Your Income

Social Security payments are derived from an average of your 35 highest-earning years. If you worked less than 35 years, then zeroes will be averaged in for the missing years of earnings. You could increase your benefits by waiting to retire and continuing to work for one or more years to remove some of those zeroes.

Even if you have already paid into the system for 35 or more years, you can work additional years at a higher income level and those will replace your lowest-earning years in your average.

Your Spouse’s Income

If you and your boyfriend do choose to get married, you will have the option to draw your benefits based on your husband’s 35 highest-earning years. Your benefit as the spouse will equal 50% of your husband’s benefit amount. If you have worked for many years in lower-paying or part-time positions and have some years when you did not earn an income, this amount may be larger than what you would receive if you based your benefits on your own income.

Your Ex-Spouse’s Income

Few people realize it is possible to draw Social Security based on an ex-spouse’s income. The benefit amount will be equal to 50% of their benefit amount. It will not reduce the amount they receive or the amount their new spouse will receive at retirement. You do not need to ask their permission or inform them that you are using their income as the basis for your benefits. It does not matter how long you have been divorced.

But here’s the catch: you must have been married to them for at least 10 years consecutively, you must be at least 62 years old when you claim, and you must not have remarried since then. If you do remarry, then the only way you can claim benefits based on your ex-spouse’s income is if the second marriage ends in divorce, annulment, or death.

The Bottom Line

A lot of factors go into a decision to get married. For some people, the sense of emotional security and stability of being officially married might matter more to them than the hard financial facts of their situation. And that’s okay.

But if you want to look just at the financial impact of marriage on your Social Security benefits, however, here’s what that might look like:

If your own earnings record would give you a benefit that is more than 50% of your ex’s benefit amount, or your boyfriend’s benefit amount, then marrying Jeff will not hurt your Social Security income.
If 50% of your ex’s benefit is more than the benefit from your earnings record and is more than 50% of Jeff’s earnings record, then it is financially advantageous not to get married and to claim your benefits based on your ex’s income.
If 50% of Jeff’s benefit is more than your benefit and more than 50% of your ex’s benefit, then you would have a financial advantage if you married Jeff and claimed benefits based on his earnings record.

Ask the Experts

In the end, it is the Social Security Administration that will make a determination of your benefit amount. So before making any decision on this, please contact the SSA to have them do an estimate for you, as there may be other factors that will impact your financial picture.

Here are some resources to get you started:

I hope the things I’ve shared have helped make your options a little clearer, and that by continuing your investigation with the Social Security Administration directly, you will be able to get some solid numbers to help you make a wise decision for your bank account, and for your heart.

Yours,
Matt