For millions of older Americans, Social Security benefits make a huge impact on their quality of life in retirement. Roughly 21% of married couples depend on their checks for at least 90% of their retirement income, according to the Social Security Administration, as do nearly half of unmarried beneficiaries.
While it's not the best idea to expect your benefits alone to support you in retirement (after all, Social Security is only designed to replace around 40% of your pre-retirement income), some retirees have no other option but to depend on their monthly checks to cover the majority of their expenses.
That means if you're expecting Social Security to be your main source of income in retirement, it's wise to make sure you're receiving as much as you're entitled to. And if you're divorced, there's a chance you may be owed more than you think.
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Divorce benefits: Who is eligible for them?
If you're married, you may be entitled to receive Social Security benefits based on your spouse's work record -- even if you've never worked a day in your life. But divorcees are also sometimes eligible for these types of benefits, and there's a chance you may be able to receive benefits based on an ex-spouse's work record.
There are a few eligibility requirements you'll have to meet in order to claim benefits based on an ex's record. First, your marriage must have lasted at least 10 years. Second, you cannot currently be married -- although if your ex-spouse has remarried, that won't affect your ability to claim based on his or her record. And third, the amount you receive in benefits based on your own work record must be less than the amount you'd receive in divorce benefits based on your ex-spouse's record.
You also must be at least 62 years old in order to start claiming benefits, and you typically need to wait for your ex-spouse to begin claiming benefits before you can start receiving your monthly checks. The exception, however, is if you've been divorced for at least two continuous years, and your spouse is eligible to receive benefits but just hasn't started claiming them yet.
Like standard retirement benefits, you won't receive the full benefit amount you're entitled to unless you claim at your full retirement age (FRA) -- which is either 66, 66 plus a few months, or 67, depending on the year you were born. Claim earlier than that, and your benefits will be reduced. So while you can begin claiming divorce benefits as early as 62, doing so will result in smaller monthly checks.
How much can you receive in divorce benefits?
If you're eligible to receive divorce benefits, you can collect up to 50% of the amount your ex-spouse is eligible to receive by claiming at his or her FRA.
You may also be able to collect divorce benefits even if you're eligible for retirement benefits based on your own work record. If you are entitled to your own benefits, the Social Security Administration will pay out your benefit amount first. Then if you're entitled to additional benefits based on an ex-spouse's record, you'll receive extra money each month on top of your benefit amount. What you won't receive, however, is both amounts. In other words, you can't "double dip" and receive your full retirement benefit in addition to your full divorce benefit amount.
For example, say you're entitled to $800 per month in Social Security benefits based on your work record if you claim at your FRA. Your ex-spouse is eligible to receive $2,000 per month in benefits by claiming at his or her FRA. If you meet all the eligibility requirements to receive divorce benefits, that means you can collect 50% of your ex-spouse's benefit amount -- or $1,000 per month in this case, assuming you both wait until your FRA to begin claiming. So the Social Security Administration will pay out your $800 per month first, then you'll receive an additional $200 per month in divorce benefits.
Keep in mind, too, that the Social Security Administration may not let you know if you're eligible for these types of benefits, because the eligibility requirements can be complex and the organization doesn't always keep track of everyone's marital history. That means if you think you're entitled to divorce benefits, it's important to make sure you're taking matters into your own hands and filing for them rather than waiting to be notified.
Social Security benefits can make the difference between enjoying retirement comfortably and pinching pennies just to make ends meet. Every dollar counts in retirement, so if you're entitled to receive extra money each month, make sure you're taking advantage of it.
