November 4, 2019 • 28 mins
A big part of divorce is figuring out the impact ending your marriage will have on your finances. The obvious concerns are what it means for your present lifestyle, but you can’t ignore the consequences on retirement. That means understanding the Divorced Spouse Social Security benefit. There are lots of rules and caveats for this benefit and it’s hard to remember them all …
Joining me for this Conversation is Leah Hadley from Great Lakes Financial Solutions (https://www.greatlakesdfs.com/). Leah is a seasoned financial professional and is committed to helping her clients make wise financial decisions before, during and after divorce. Leah as a free Divorce Recovery: A Financial Guide To Moving On available for download at her site.
You can find a synopsis of this episode at my blog: https://sincemydivorce.com/what-you-need-to-know-about-the-divorced-spouse-social-security-benefit
Joining me for this Conversation is Leah Hadley from Great Lakes Financial Solutions (https://www.greatlakesdfs.com/). Leah is a seasoned financial professional and is committed to helping her clients make wise financial decisions before, during and after divorce. Leah as a free Divorce Recovery: A Financial Guide To Moving On available for download at her site.
You can find a synopsis of this episode at my blog: https://sincemydivorce.com/what-you-need-to-know-about-the-divorced-spouse-social-security-benefit
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
Getting a divorce, Even thinking aboutgetting a divorce can be overwhelming, scary,
and sometimes exciting. Join divorce coachand mediator Mandy Walker for conversations about
divorce. The more you know,the easier it will be to make your
divorce healthier, less trustful, andto put it behind you. Here's Mandy.
(00:24):
Welcome to conversations about divorce and MandyWalker. And today we're talking about
divorce and social security. Now,putting aside questions of whether social Security is
going to be around, understanding whathappens to your social security in divorce is
just as important as figuring out anyother financial asset. The closer you are
(00:45):
to retirement age, the more importantthis issue is. And it is particularly
important if you've been the non workingspouse or if your spouse is the higher
income owner. Joining me today togive us a primer on social security benefits
in divorce is Leah Hadley from GreatLakes Divorce Financial Solutions. Leah is a
(01:07):
seasoned financial professional. She's committed tohelping her clients make wise financial decisions before,
during, and after divorce. WelcomeLeah, Thank you so much for
having me so that, Leah,what we are really concerned about for today's
talk is the divorce spouse social Securitybenefit. And I was wondering if could
(01:33):
you just give us in a nutshellwhat that benefit is. Sure, absolutely
so, in a nutshell, ifyour marriage lasted at least ten years or
longer, you may be eligible tocollect on your ex spouse's social Security record.
(01:53):
Now, there are some criteria thatyou have to qualify in order to
be able to collect on it,but that ten year mark is kind of
what we focus on. So ifyou were married for at least ten years
or longer, you may be eligibleto collect on your expouse's record. Great,
and thank you for making that soclear in a nutshell, because I've
(02:15):
got lots more questions on this,so I know it's not as simple as
that, But my first one is, you know, this benefit kicks in
if you've been married for ten years, So if you've been married for nine
years or eight and a half years, you might really want to consider delaying
divorce until you've passed that ten yearmark. You're absolutely right, And you
(02:38):
know, there's a lot of reasonsthat people get divorced, and sometimes you
know, it just really doesn't makesense to wait. But if it's possible.
I've seen some cases where people werejust a few months shy of that
ten year mark, and if theycould have just extended out even just the
process a little bit longer, theywould have been eligible for that benefit.
(03:00):
So being very aware of kind ofhow long the divorce or excuse me,
how long the marriage has gone onfor, as well of how long that
divorce process is going to be ifyou're around that ten year mark, is
really important. And would you knowif if you had a legal separation where
you are still married, does thatstill qualify you as being married for Social
(03:22):
Security purposes? It does, Okay, So that might be an option too,
is to go ahead with a legalseparation and hold off on the divorce.
So I can see where people wouldthink if you were the spouse who
had the Social Security benefit, you'regoing to be concerned like, Ah,
what do you mean, I'm givingaway part of my benefit. But that's
(03:44):
another feature of this is that ifyour spouse does claim the divorce spouse benefit,
it doesn't impact your benefit, itdoesn't reduce it. Yeah, that's
correct, and you're absolutely right.That is a concern that I always hear
from the else where. They wouldbe collecting on that record. There's always
a concern. I really encourage peoplewhen they're going through the divorce process for
(04:08):
both parties to pull their social securedrecords at that time, and you can
get those statements right on the SocialSecurity website at SSA dot gov. You
just create a log in for yourselfand you can access your own statement at
that time. But I really doencourage both parties to access that statement when
they're going through the process, andso that way they both know where they
(04:30):
stand in terms of that Social Securitybenefit. In particular, more and more
people are getting divorced as they getcloser and closer to retirement, and so
as you're closer and closer to thatretirement age, that obviously that statement is
going to be more reflective and moreaccurate as to what the benefit earned will
be. So whenever I tell people, yeah, you need to pull that
(04:50):
statement, I always get that question, while you know, what, if
he or she's collecting on my record, how does that impact my benefit?
And it has no impact act whatsoever. In fact, your X does not
need to know that you're collecting ontheir record at all. You don't need
to contact them. You just workdirectly through the Social Security Office to make
it happen, And thank you.I like your point about going to Social
(05:15):
SSA dot gov and getting your SocialSecurity statement as a discipline, that's something
we should all be doing once ayear. And I know that they send
you remind us once you've signed up, but I think it's part of the
divorce process too. You should actuallyexchange those statements because then you do know
you. One of the important thingsthat you need is a Social Security number
(05:42):
to be able to apply for thedivorce spus's benefit, isn't it It's helpful
to have it. If you don'thave that number, you can work with
the Social Security Administration in order tobe able to get that information. And
even if you just have access toone of your old tax returns, you
can get it on. But yes, it's certainly it's easier to have your
(06:02):
vaccess to it, for sure.Okay, so let's dive into some of
those nitty whitty details. If Iknow, when would I want to claim
my divorce bas benefit as opposed tomy own benefit, how does that get
figured out? Right? So whatyou want to look at is how much
(06:26):
your benefit is what you've earned,and then the spellfial benefit is fifty percent,
So if fifty percent of your excessbenefit is higher than your benefit,
you actually first claim your benefit andthen the Social Security will be paying you
the difference between the two. Soif fifty percent of your excess benefit is
(06:49):
higher, then you would want tomake sure you claim both benefits. Okay,
and when can I claim it?Does it matter what age my now
former spouse is, So that's it'skind of a question. So if you
(07:11):
are getting divorced very close to thatage of collecting Social Security, you do
need to be divorced for at leasttwo years to be able to collect on
their record, so that's important toknow. And then the other thing is
if you're X is eligible for SocialSecurity, but it's choosing not to collect
on it, you still can't collecton their record, so you don't have
(07:32):
to wait until they're taking it.Okay, all right, But then but
the point is that your X hasto be eligible. So if your ex
is younger than you and you're inretirement and you're eligible to start collecting,
whether that's sixty two or you're choosingit sixty five or something, you might
still have to wait until your exis eligible, right, so you can
(07:58):
start collecting on your own record,and then once that that other benefit is
available to you, then you canstart collecting on that as well. Okay,
okay um? And does I knowthe social Security? You can postpone
drawing it until your late age.Is that? Is there a benefit to
(08:22):
that? Like does the amount ofmy benefit as adiviual spouse increase? Absolutely?
So you can. Anybody can starttaking Social Security who has earned a
benefit beginning at age six to two. I really strongly encourage people to sit
down and look at social Security strategicallyin terms of their overall financial plan,
(08:45):
because the reality is social security incomeis a large portion of people's income and
retirement a lot of times, andso you really want to be able to
maximize that income. And a lotof times people don't really think about social
Security as an asset, but itis something that you've been paying into,
and so you do want to getthe highest possible return on that particular benefit,
(09:09):
and so in order to do that, it's really important to look at
your overall plan, look at yourother sources of income determined when you really
need to take Social Security. Butyou also want to look at things like
life expectancy, if there's any healthconcerns, those kind of things. But
every year that you delay it,you are getting an increase in the benefit
amount. So if you are ableto delay it a few years, then
(09:31):
you're going to be able to geta little bit more. If you can
delay it as long as possible,you're going to get the maximum benefit.
So it really just depends on youroverall plan when it makes sense to start
taking. Okay, and that iswhat you're saying there to me, that
would push me to seeking the healthof an expert to help me with that
(09:54):
social security planning, because that's alreadystarting to boggle my mind. It says
it absolutely gets a little bit complicated, and I do think it is important
to sit down with somebody who reallyis not only familiar with Social Security,
but also those divorce benefits as well. And so a certified divorce financial analyst
(10:16):
is that's the designation where a professionalspends more time in continuing education on divorce
specific topics. I think they tendto be the most well versed as it
relates to the divorce issues. Butcertainly a financial planner who has the social
security strategic planning background is going tobe tremendously helpful in helping you determine when
(10:37):
the best time to take that benefitis. So another question here is,
so that's what happens. Let's saymy fulm of spouse is older than me,
or that I've chosen to delay mySocial Security benefit. What happens if
my fulma spouse dies before I startdrawing the divorce spouse benefit? Does that
(11:00):
mean I that's a really good question. So that you actually, as long
as you were married for that tenyear period, you may be eligible for
a surviving divorced spouse benefit. Andso that benefit is actually a little bit
different. Um, it's similar toI know, Um, it's similar to
(11:22):
a widow or a widowers benefit.Um. And that you actually may be
able to get the full amount ofyour access benefit. So whatever amount they
would have been eligible for. Insteadof fifty percent, you would actually be
eligible for one hundred percent. Nowthat is not You're not gonna be eligible
for that if you remarry before agesixty. So that's another trick there.
(11:46):
Sometimes people do wait to remarry ifthey're looking at getting remarried, they wait
until after sixty for that reason.So there's some tricky numbers. So I
know there's a lot of different likelittle details, but you are potentially eligible
to collect on that full benefit.And it does not matter if your ex
(12:07):
remarried and somebody else is collecting onthat benefit too that you have, you're
not impacted by that at all.Okay, So I got a couple of
observations there. Wow, So likeone person if they've my ex, if
they'd remarried, two people could claimthat surviving spouse benefit. Well, no
wonder, Social Security is in difficultright, But that's good to know.
(12:33):
You had mentioned that that you haveto be unmarried. Do you have to
be unmarried to get the divorce spousebenefit at the time you claim it?
So? Yes, So on thesurviving spouse you can actually be remarried as
long as you remarried after age sixty, right, But on the just the
(12:58):
regular divorce spouse benefit, you're noteligible if you are remarried, Okay,
okay, And then what happens ifyou are drawing the and divorced spouse benefit
and you get remarried if you're alreadydrawing. So it's one of those things
(13:20):
where it kind of depends. Soif you are remarrying, you actually then
you have a different benefit that's availableto you. So that's through your new
spouse, and so you would beeligible for the spousehold benefit with that person,
but not with the X. Soit could be the same amount,
it could be less, it couldbe more, but that would be the
(13:43):
sehol benefit that's available to you ifyou remarry. Okay, So again it's
like before you remarry, go talkto your Social Security planning expert and get
them to help you figure out whatgetting married we'll do to the benefit.
That's all I mean. It reallycan have a huge impact. And there
(14:03):
are all these little nuanced rules.So even within the bigger ones that I've
talked about already, there there's alittle nuances. So it is important to
talk to the absolutely right. Sowhat if I die before I start drawing
my Social Security benefit eiven my ownor my divorce spouses benefit, I should
(14:24):
know this, But and can Idesignate a beneficiary and would they receive the
remaining benefit? So unfortunately that isnot the case. It does depend if
you do have some dependence that arestill under the age of eighteen, so
there are some benefits that are availableto them. Okay. Likewise, even
(14:46):
if you. And that's one ofthose tricky things where even if you are
remarried, but you are taking careof children that you had with an X
passed, there may be benefits availableto you. But otherwise, no,
once somebody's over the age of eighteen, there's not going to be an ongoing
benefit that's available to assign to somebody. Okay, all right, So that's
(15:11):
kind of like it's not necessarily agood rule, but at least it's nice
and clear what that benefit is.Leah, I have a ton more questions
for you, but we're going totake a short break. Here. You're
listening to conversations about divorce, andtoday we're talking about social security in divorce.
(15:33):
My guest today is Leah Hadley fromGreat Lakes Divorce Financial Solutions. Leah
is a seasoned financial professional. She'scommitted to helping her clients make wise financial
decisions before, during, and afterdivorce. And Leah, you have a
guide on financial recovery for our listeners. I do you can ask us that
(15:58):
free down mode after you're worce dotcom. So that is a guy that
kind of goes through all the importantdetails you need to keep in mind.
As you were covering financially after adivorce. So that's that after your divorce.
That sounds like a great, greatresource and as well listeners. Leah's
website is Great Lakes DFS dot com. I'll put the link on the show
(16:21):
page so you'll be able to gothere. And so let me see another
question for you, and I knowI'm bombarding you with this, I'm sorry.
What if your spouse is already drawingSocial Security when you get divorced?
How does that change? Thinks Ifyour spouse is already drawing Social Security at
(16:45):
the time of your divorce, UM, it doesn't really have an impact.
So you would still be eligible forthat benefit. And if you are already
collecting on their record, because rememberthe spousal benefit as well as a divorce
spout benefit, right, if you'realready collecting on that record, you can
continue to collect. Okay, Okay, So it's really this matters out until
(17:11):
the point did you start start claiming. UM. Can we talk a little
bit about if I have a pensionthrough like a teaching um public public system,
because I as I understand it thatthere is an offset with Social Security
for that that is correct us reallydesigned. So if you think about it
(17:37):
when somebody is employed with one ofthe public punsion plans, they are contributing
to that public punsion instead of contributingto Social Security. The Social Security spousal
benefit was really designed for those whomaybe stayed at home or worked in a
relatively low income job to be ableto have some kind of benefit through you
(18:02):
know, their marriage, through thatspouse, and especially if that person were
to pass away. But the ideawasn't if the spouse was working in a
public pension and contributing to that publicpension, that then they would be able
to collect on both. And sothere is an offset. And in a
lot of cases, particularly if youare collecting you know, and an entire
(18:26):
like you worked your whole career andyou're getting your public pension, you may
not be eligible for any Social Securityor a very very limited amount. There
is a calculator on the Social Securitywebsite that I frequently use with clients.
It can be a little confusing,I'll be honest, but I now,
(18:48):
who're like put everything else right,But it can give you an idea if
you are collecting a public pension andyou might have a social Security benefit,
what that would mean and so whatthe ultimate calculation will be. In addition
to that, I always really encouragepeople who are going through the divorce process
(19:10):
and talking about the public pension tothink about that social security asset as well.
So keep in mind a lot oftimes people are just kind of splitting
things down the middle when they're lookingat dividing up assets and a divorce.
But for a public pension that isa divisible asset in a divorce, social
(19:32):
security is not a divisible asset ina divorce. So if one person is
working for an entity and they area member of that pension and contributing to
that pension and not contributing to socialsecurity, their spouse is contributing to social
security, a lot of chiss.It may not be real equal if you
(19:53):
just divide that pension in half,because the spouse still gets their full social
Security benefit that they've earned during themarriage, and you're giving up half of
your pension benefits. And so thatis one of those complexities that when I'm
working with science, we talk alot about how do you really look at
the retirement assets and do what isconsidered fair. So remember, social security
(20:15):
isn't an asset that's divisible biling adivorce, but it's still that benefit that
was earned during the course of amarriage that are very similar to a benefits
that was earned in a public pension, and different states do have some different
case law around that. I'm gladthat you raise that point, because that
was one of the questions that Iwanted to ask, is you're You're right?
(20:37):
Oftentimes I don't. I think socialsecurity is kind of pushed to one
side, and maybe that's the rightway to do it if people both if
both the parties have their own retirementassets. That I hear you when you
say that when there's a pension froma public system like it teachers or police
(20:59):
or fire, that that may notbe the most equitable way of looking at
the division. So that would pointto then, you know, again going
back to your earlier point of theimportance of getting both of you getting your
social Security statements so you could seewhat the projections are for your social Security
benefit and that would give the professionalsthat you're working with the information that they
(21:25):
need to help create a more equitablesettlement. You're absolutely right, and I
do caution people that these are allfinancial issues that I'm talking about, and
attorneys offer fantastic legal advice and theyhave lots of lots of training on the
legal issues around the divorce. Theydon't always have as much training on the
(21:51):
financial issues. So some of thesepension related issues, the social security issues,
some attorneys really have spent a lotof time to educate themselves on these
topics. But I have noticed thata lot of the people that I work
with are surprised that their attorney didn'tprovide them more information when it comes to
(22:11):
either how to divide the pension,what the options are, what the options
are with social security. And Iwould just say, there are professionals out
there, like I had mentioned before, the certified Divorce Financial Analysts, and
you can find them on the Institutefor Divorce Financial Analysts website. They have
a search function and you can findsomebody near you who who's done that training.
They're going to really be the onewho's well versed in these financial issues.
(22:36):
And it's important to be proactive andreally fully understand all of the different
retirement accounts that you're looking at andwhat your options are when you're when you're
dividing these assets because a lot oftimes, like I said, the attorneys
don't have the background when it comesto some of these very specific financial times,
(22:56):
and I agree. I agree withyou. I've run into that myself,
and then I'm a certified divorce financialanalyst. But I can tell you
that I clearly need to do somestudying up on social Security because I'm not
nowhere near as familiar as you are. I do like the point that you
(23:17):
make about making sure that you considerthe social security benefit of the privately employed
individual when you're offsetting a public pension. So let's let me jump back to
another thing that we touched on.We touched on the surviving spouse benefit,
(23:37):
and that could still be payable evenif your ex had remarried. Let's flip
that around, and let's say thatyou've been married several times and you could
claim the divorce spouse benefit from severalspouses. I'm assuming you can only claim
(23:59):
it from one, and presumably thenyou're going to claim it from the spouse
who has the larger benefit. Thatis my understanding as well, But I
can honestly say I've never run intothat, and then I'm assuming too,
like if you start claiming it fromone, you can't switch your mind and
change it. And start from claimingfrom another later on. Well, I'm
(24:23):
not sure about that because typically theway the rules work is that you can
always get the maximum benefit available toyou, and so if there is a
higher benefit amount that is that you'reeligible before, typically that's the one you
know that you might collect the WOW. So that again points to really when
(24:45):
you're getting into social security, reallyfinding an expert to help advise you.
I mean, have you found thegoing to the Social Security Office and doing
this yourself? People have had successwith that. It's so hit or miss.
Sometimes people just get these wonderful peopleat the Social Security Office who are
(25:07):
really able to answer their questions andwalk through the stuff with them, and
sometimes they just get actually misinformation directlyfrom the Social Security Office. And sometimes
I tell people just ask another personbecause they haven't gotten accurate information. So
unfortunately it is hit or miss atthe end of the day. To get
(25:30):
the records that we need, weusually do have to work directly with the
Social Security Office to get those records, and so I really try to help
empower clients to know exactly what toask and make sure that they are getting
the information that they need, aswell as making sure that they're doing what
they need to maximize that. Nah, we are coming up on time here.
(25:51):
But I wondered if you had onemore tips that you want to make
sure that you share about the divulspouse benefit. Oh well, if I
would focus on that ten years.I can't tell you how important that is
and how much it breaks my heartwhen somebody misses that ten year mark by
just a couple of months. Soif I could leave any lasting I know
I threw a lot of different agesand numbers out there, but that ten
(26:15):
years. If you're coming up onten years of marriage and your spouse earned
significantly more than you do, ifyou can make it last that ten years,
that's going to make a huge impacton your retirement, right, And
it's so important to be looking atwhat your post divorce finances are going to
be. I'm also going to addto that is like before you go remarrying,
(26:40):
especially if you're close to drawing SocialSecurity yourself, you really want to
look and see what sort of impactthat's going to make on your benefit.
Absolutely, yeah, thank you somuch for joining us today. I know
that it's hard to keep all theserules straight and there always seems to be
like two or three caveats to everything, but you did an awesome job of
(27:03):
walking us through that. Thank you, and thank you so much for having
me. I appreciate. This ismy guest today as Leah Hadley from Great
Lakes Divorce Financial Solutions. Leah isa seasoned financial professional committed to helping her
clients make wise financial decisions before,during, and after divorce. And you
can tell that she knows her socialsecurity stuff inside out. Leah's website is
(27:26):
Great Lakes dfs dot com. I'llput that link in the show page and
as well as on the blog.And Leah, do you want to give
your download for the financial recovery onemore time? Absolutely, you can get
your free Financial Recovery Guide after yourdivorce dot com. How you divide your
(27:48):
financial assets has a profound impact onyour financial future, and that's why you
should not ignore the social security question. At the very least, you want
to determine if you're likely to beeligible for the divorce Spouses Social Security benefit.
If you're eligible, then it's smartto get some projections for what the
benefit would likely be and then youcan use that in your financial planning.
(28:11):
And you can also use it inthe negotiations for your dividing of your assets.
Getting the information means that you're makinginformed decisions and taking responsibility for your
future. And that's the big takeawayhere. It's about taking responsibility for your
future. I want to thank youfor listening today. If you hop over
(28:33):
to my blog sincem Divorce dot com, you'll find a synopsis of this conversation
and you can follow me at SinceMy Divorce on Twitter and on Facebook.
You can follow Leah on Twitter andFacebook as well at Great Lakes DFS.
I hope you'll join us again nexttime for more conversations about divorce.
Getting a divorce, Even thinking aboutgetting a divorce can be overwhelming, scary,
and sometimes exciting. Join divorce coachand mediator Mandy Walker for conversations about
divorce. The more you know,the easier it will be to make your
divorce healthier, less trustful, andto put it behind you. Here's Mandy.
(00:24):
Welcome to conversations about divorce and MandyWalker. And today we're talking about
divorce and social security. Now,putting aside questions of whether social Security is
going to be around, understanding whathappens to your social security in divorce is
just as important as figuring out anyother financial asset. The closer you are
(00:45):
to retirement age, the more importantthis issue is. And it is particularly
important if you've been the non workingspouse or if your spouse is the higher
income owner. Joining me today togive us a primer on social security benefits
in divorce is Leah Hadley from GreatLakes Divorce Financial Solutions. Leah is a
(01:07):
seasoned financial professional. She's committed tohelping her clients make wise financial decisions before,
during, and after divorce. WelcomeLeah, Thank you so much for
having me so that, Leah,what we are really concerned about for today's
talk is the divorce spouse social Securitybenefit. And I was wondering if could
(01:33):
you just give us in a nutshellwhat that benefit is. Sure, absolutely
so, in a nutshell, ifyour marriage lasted at least ten years or
longer, you may be eligible tocollect on your ex spouse's social Security record.
(01:53):
Now, there are some criteria thatyou have to qualify in order to
be able to collect on it,but that ten year mark is kind of
what we focus on. So ifyou were married for at least ten years
or longer, you may be eligibleto collect on your expouse's record. Great,
and thank you for making that soclear in a nutshell, because I've
(02:15):
got lots more questions on this,so I know it's not as simple as
that, But my first one is, you know, this benefit kicks in
if you've been married for ten years, So if you've been married for nine
years or eight and a half years, you might really want to consider delaying
divorce until you've passed that ten yearmark. You're absolutely right, And you
(02:38):
know, there's a lot of reasonsthat people get divorced, and sometimes you
know, it just really doesn't makesense to wait. But if it's possible.
I've seen some cases where people werejust a few months shy of that
ten year mark, and if theycould have just extended out even just the
process a little bit longer, theywould have been eligible for that benefit.
(03:00):
So being very aware of kind ofhow long the divorce or excuse me,
how long the marriage has gone onfor, as well of how long that
divorce process is going to be ifyou're around that ten year mark, is
really important. And would you knowif if you had a legal separation where
you are still married, does thatstill qualify you as being married for Social
(03:22):
Security purposes? It does, Okay, So that might be an option too,
is to go ahead with a legalseparation and hold off on the divorce.
So I can see where people wouldthink if you were the spouse who
had the Social Security benefit, you'regoing to be concerned like, Ah,
what do you mean, I'm givingaway part of my benefit. But that's
(03:44):
another feature of this is that ifyour spouse does claim the divorce spouse benefit,
it doesn't impact your benefit, itdoesn't reduce it. Yeah, that's
correct, and you're absolutely right.That is a concern that I always hear
from the else where. They wouldbe collecting on that record. There's always
a concern. I really encourage peoplewhen they're going through the divorce process for
(04:08):
both parties to pull their social securedrecords at that time, and you can
get those statements right on the SocialSecurity website at SSA dot gov. You
just create a log in for yourselfand you can access your own statement at
that time. But I really doencourage both parties to access that statement when
they're going through the process, andso that way they both know where they
(04:30):
stand in terms of that Social Securitybenefit. In particular, more and more
people are getting divorced as they getcloser and closer to retirement, and so
as you're closer and closer to thatretirement age, that obviously that statement is
going to be more reflective and moreaccurate as to what the benefit earned will
be. So whenever I tell people, yeah, you need to pull that
(04:50):
statement, I always get that question, while you know, what, if
he or she's collecting on my record, how does that impact my benefit?
And it has no impact act whatsoever. In fact, your X does not
need to know that you're collecting ontheir record at all. You don't need
to contact them. You just workdirectly through the Social Security Office to make
it happen, And thank you.I like your point about going to Social
(05:15):
SSA dot gov and getting your SocialSecurity statement as a discipline, that's something
we should all be doing once ayear. And I know that they send
you remind us once you've signed up, but I think it's part of the
divorce process too. You should actuallyexchange those statements because then you do know
you. One of the important thingsthat you need is a Social Security number
(05:42):
to be able to apply for thedivorce spus's benefit, isn't it It's helpful
to have it. If you don'thave that number, you can work with
the Social Security Administration in order tobe able to get that information. And
even if you just have access toone of your old tax returns, you
can get it on. But yes, it's certainly it's easier to have your
(06:02):
vaccess to it, for sure.Okay, so let's dive into some of
those nitty whitty details. If Iknow, when would I want to claim
my divorce bas benefit as opposed tomy own benefit, how does that get
figured out? Right? So whatyou want to look at is how much
(06:26):
your benefit is what you've earned,and then the spellfial benefit is fifty percent,
So if fifty percent of your excessbenefit is higher than your benefit,
you actually first claim your benefit andthen the Social Security will be paying you
the difference between the two. Soif fifty percent of your excess benefit is
(06:49):
higher, then you would want tomake sure you claim both benefits. Okay,
and when can I claim it?Does it matter what age my now
former spouse is, So that's it'skind of a question. So if you
(07:11):
are getting divorced very close to thatage of collecting Social Security, you do
need to be divorced for at leasttwo years to be able to collect on
their record, so that's important toknow. And then the other thing is
if you're X is eligible for SocialSecurity, but it's choosing not to collect
on it, you still can't collecton their record, so you don't have
(07:32):
to wait until they're taking it.Okay, all right, But then but
the point is that your X hasto be eligible. So if your ex
is younger than you and you're inretirement and you're eligible to start collecting,
whether that's sixty two or you're choosingit sixty five or something, you might
still have to wait until your exis eligible, right, so you can
(07:58):
start collecting on your own record,and then once that that other benefit is
available to you, then you canstart collecting on that as well. Okay,
okay um? And does I knowthe social Security? You can postpone
drawing it until your late age.Is that? Is there a benefit to
(08:22):
that? Like does the amount ofmy benefit as adiviual spouse increase? Absolutely?
So you can. Anybody can starttaking Social Security who has earned a
benefit beginning at age six to two. I really strongly encourage people to sit
down and look at social Security strategicallyin terms of their overall financial plan,
(08:45):
because the reality is social security incomeis a large portion of people's income and
retirement a lot of times, andso you really want to be able to
maximize that income. And a lotof times people don't really think about social
Security as an asset, but itis something that you've been paying into,
and so you do want to getthe highest possible return on that particular benefit,
(09:09):
and so in order to do that, it's really important to look at
your overall plan, look at yourother sources of income determined when you really
need to take Social Security. Butyou also want to look at things like
life expectancy, if there's any healthconcerns, those kind of things. But
every year that you delay it,you are getting an increase in the benefit
amount. So if you are ableto delay it a few years, then
(09:31):
you're going to be able to geta little bit more. If you can
delay it as long as possible,you're going to get the maximum benefit.
So it really just depends on youroverall plan when it makes sense to start
taking. Okay, and that iswhat you're saying there to me, that
would push me to seeking the healthof an expert to help me with that
(09:54):
social security planning, because that's alreadystarting to boggle my mind. It says
it absolutely gets a little bit complicated, and I do think it is important
to sit down with somebody who reallyis not only familiar with Social Security,
but also those divorce benefits as well. And so a certified divorce financial analyst
(10:16):
is that's the designation where a professionalspends more time in continuing education on divorce
specific topics. I think they tendto be the most well versed as it
relates to the divorce issues. Butcertainly a financial planner who has the social
security strategic planning background is going tobe tremendously helpful in helping you determine when
(10:37):
the best time to take that benefitis. So another question here is,
so that's what happens. Let's saymy fulm of spouse is older than me,
or that I've chosen to delay mySocial Security benefit. What happens if
my fulma spouse dies before I startdrawing the divorce spouse benefit? Does that
(11:00):
mean I that's a really good question. So that you actually, as long
as you were married for that tenyear period, you may be eligible for
a surviving divorced spouse benefit. Andso that benefit is actually a little bit
different. Um, it's similar toI know, Um, it's similar to
(11:22):
a widow or a widowers benefit.Um. And that you actually may be
able to get the full amount ofyour access benefit. So whatever amount they
would have been eligible for. Insteadof fifty percent, you would actually be
eligible for one hundred percent. Nowthat is not You're not gonna be eligible
for that if you remarry before agesixty. So that's another trick there.
(11:46):
Sometimes people do wait to remarry ifthey're looking at getting remarried, they wait
until after sixty for that reason.So there's some tricky numbers. So I
know there's a lot of different likelittle details, but you are potentially eligible
to collect on that full benefit.And it does not matter if your ex
(12:07):
remarried and somebody else is collecting onthat benefit too that you have, you're
not impacted by that at all.Okay, So I got a couple of
observations there. Wow, So likeone person if they've my ex, if
they'd remarried, two people could claimthat surviving spouse benefit. Well, no
wonder, Social Security is in difficultright, But that's good to know.
(12:33):
You had mentioned that that you haveto be unmarried. Do you have to
be unmarried to get the divorce spousebenefit at the time you claim it?
So? Yes, So on thesurviving spouse you can actually be remarried as
long as you remarried after age sixty, right, But on the just the
(12:58):
regular divorce spouse benefit, you're noteligible if you are remarried, Okay,
okay, And then what happens ifyou are drawing the and divorced spouse benefit
and you get remarried if you're alreadydrawing. So it's one of those things
(13:20):
where it kind of depends. Soif you are remarrying, you actually then
you have a different benefit that's availableto you. So that's through your new
spouse, and so you would beeligible for the spousehold benefit with that person,
but not with the X. Soit could be the same amount,
it could be less, it couldbe more, but that would be the
(13:43):
sehol benefit that's available to you ifyou remarry. Okay, So again it's
like before you remarry, go talkto your Social Security planning expert and get
them to help you figure out whatgetting married we'll do to the benefit.
That's all I mean. It reallycan have a huge impact. And there
(14:03):
are all these little nuanced rules.So even within the bigger ones that I've
talked about already, there there's alittle nuances. So it is important to
talk to the absolutely right. Sowhat if I die before I start drawing
my Social Security benefit eiven my ownor my divorce spouses benefit, I should
(14:24):
know this, But and can Idesignate a beneficiary and would they receive the
remaining benefit? So unfortunately that isnot the case. It does depend if
you do have some dependence that arestill under the age of eighteen, so
there are some benefits that are availableto them. Okay. Likewise, even
(14:46):
if you. And that's one ofthose tricky things where even if you are
remarried, but you are taking careof children that you had with an X
passed, there may be benefits availableto you. But otherwise, no,
once somebody's over the age of eighteen, there's not going to be an ongoing
benefit that's available to assign to somebody. Okay, all right, So that's
(15:11):
kind of like it's not necessarily agood rule, but at least it's nice
and clear what that benefit is.Leah, I have a ton more questions
for you, but we're going totake a short break. Here. You're
listening to conversations about divorce, andtoday we're talking about social security in divorce.
(15:33):
My guest today is Leah Hadley fromGreat Lakes Divorce Financial Solutions. Leah
is a seasoned financial professional. She'scommitted to helping her clients make wise financial
decisions before, during, and afterdivorce. And Leah, you have a
guide on financial recovery for our listeners. I do you can ask us that
(15:58):
free down mode after you're worce dotcom. So that is a guy that
kind of goes through all the importantdetails you need to keep in mind.
As you were covering financially after adivorce. So that's that after your divorce.
That sounds like a great, greatresource and as well listeners. Leah's
website is Great Lakes DFS dot com. I'll put the link on the show
(16:21):
page so you'll be able to gothere. And so let me see another
question for you, and I knowI'm bombarding you with this, I'm sorry.
What if your spouse is already drawingSocial Security when you get divorced?
How does that change? Thinks Ifyour spouse is already drawing Social Security at
(16:45):
the time of your divorce, UM, it doesn't really have an impact.
So you would still be eligible forthat benefit. And if you are already
collecting on their record, because rememberthe spousal benefit as well as a divorce
spout benefit, right, if you'realready collecting on that record, you can
continue to collect. Okay, Okay, So it's really this matters out until
(17:11):
the point did you start start claiming. UM. Can we talk a little
bit about if I have a pensionthrough like a teaching um public public system,
because I as I understand it thatthere is an offset with Social Security
for that that is correct us reallydesigned. So if you think about it
(17:37):
when somebody is employed with one ofthe public punsion plans, they are contributing
to that public punsion instead of contributingto Social Security. The Social Security spousal
benefit was really designed for those whomaybe stayed at home or worked in a
relatively low income job to be ableto have some kind of benefit through you
(18:02):
know, their marriage, through thatspouse, and especially if that person were
to pass away. But the ideawasn't if the spouse was working in a
public pension and contributing to that publicpension, that then they would be able
to collect on both. And sothere is an offset. And in a
lot of cases, particularly if youare collecting you know, and an entire
(18:26):
like you worked your whole career andyou're getting your public pension, you may
not be eligible for any Social Securityor a very very limited amount. There
is a calculator on the Social Securitywebsite that I frequently use with clients.
It can be a little confusing,I'll be honest, but I now,
(18:48):
who're like put everything else right,But it can give you an idea if
you are collecting a public pension andyou might have a social Security benefit,
what that would mean and so whatthe ultimate calculation will be. In addition
to that, I always really encouragepeople who are going through the divorce process
(19:10):
and talking about the public pension tothink about that social security asset as well.
So keep in mind a lot oftimes people are just kind of splitting
things down the middle when they're lookingat dividing up assets and a divorce.
But for a public pension that isa divisible asset in a divorce, social
(19:32):
security is not a divisible asset ina divorce. So if one person is
working for an entity and they area member of that pension and contributing to
that pension and not contributing to socialsecurity, their spouse is contributing to social
security, a lot of chiss.It may not be real equal if you
(19:53):
just divide that pension in half,because the spouse still gets their full social
Security benefit that they've earned during themarriage, and you're giving up half of
your pension benefits. And so thatis one of those complexities that when I'm
working with science, we talk alot about how do you really look at
the retirement assets and do what isconsidered fair. So remember, social security
(20:15):
isn't an asset that's divisible biling adivorce, but it's still that benefit that
was earned during the course of amarriage that are very similar to a benefits
that was earned in a public pension, and different states do have some different
case law around that. I'm gladthat you raise that point, because that
was one of the questions that Iwanted to ask, is you're You're right?
(20:37):
Oftentimes I don't. I think socialsecurity is kind of pushed to one
side, and maybe that's the rightway to do it if people both if
both the parties have their own retirementassets. That I hear you when you
say that when there's a pension froma public system like it teachers or police
(20:59):
or fire, that that may notbe the most equitable way of looking at
the division. So that would pointto then, you know, again going
back to your earlier point of theimportance of getting both of you getting your
social Security statements so you could seewhat the projections are for your social Security
benefit and that would give the professionalsthat you're working with the information that they
(21:25):
need to help create a more equitablesettlement. You're absolutely right, and I
do caution people that these are allfinancial issues that I'm talking about, and
attorneys offer fantastic legal advice and theyhave lots of lots of training on the
legal issues around the divorce. Theydon't always have as much training on the
(21:51):
financial issues. So some of thesepension related issues, the social security issues,
some attorneys really have spent a lotof time to educate themselves on these
topics. But I have noticed thata lot of the people that I work
with are surprised that their attorney didn'tprovide them more information when it comes to
(22:11):
either how to divide the pension,what the options are, what the options
are with social security. And Iwould just say, there are professionals out
there, like I had mentioned before, the certified Divorce Financial Analysts, and
you can find them on the Institutefor Divorce Financial Analysts website. They have
a search function and you can findsomebody near you who who's done that training.
They're going to really be the onewho's well versed in these financial issues.
(22:36):
And it's important to be proactive andreally fully understand all of the different
retirement accounts that you're looking at andwhat your options are when you're when you're
dividing these assets because a lot oftimes, like I said, the attorneys
don't have the background when it comesto some of these very specific financial times,
(22:56):
and I agree. I agree withyou. I've run into that myself,
and then I'm a certified divorce financialanalyst. But I can tell you
that I clearly need to do somestudying up on social Security because I'm not
nowhere near as familiar as you are. I do like the point that you
(23:17):
make about making sure that you considerthe social security benefit of the privately employed
individual when you're offsetting a public pension. So let's let me jump back to
another thing that we touched on.We touched on the surviving spouse benefit,
(23:37):
and that could still be payable evenif your ex had remarried. Let's flip
that around, and let's say thatyou've been married several times and you could
claim the divorce spouse benefit from severalspouses. I'm assuming you can only claim
(23:59):
it from one, and presumably thenyou're going to claim it from the spouse
who has the larger benefit. Thatis my understanding as well, But I
can honestly say I've never run intothat, and then I'm assuming too,
like if you start claiming it fromone, you can't switch your mind and
change it. And start from claimingfrom another later on. Well, I'm
(24:23):
not sure about that because typically theway the rules work is that you can
always get the maximum benefit available toyou, and so if there is a
higher benefit amount that is that you'reeligible before, typically that's the one you
know that you might collect the WOW. So that again points to really when
(24:45):
you're getting into social security, reallyfinding an expert to help advise you.
I mean, have you found thegoing to the Social Security Office and doing
this yourself? People have had successwith that. It's so hit or miss.
Sometimes people just get these wonderful peopleat the Social Security Office who are
(25:07):
really able to answer their questions andwalk through the stuff with them, and
sometimes they just get actually misinformation directlyfrom the Social Security Office. And sometimes
I tell people just ask another personbecause they haven't gotten accurate information. So
unfortunately it is hit or miss atthe end of the day. To get
(25:30):
the records that we need, weusually do have to work directly with the
Social Security Office to get those records, and so I really try to help
empower clients to know exactly what toask and make sure that they are getting
the information that they need, aswell as making sure that they're doing what
they need to maximize that. Nah, we are coming up on time here.
(25:51):
But I wondered if you had onemore tips that you want to make
sure that you share about the divulspouse benefit. Oh well, if I
would focus on that ten years.I can't tell you how important that is
and how much it breaks my heartwhen somebody misses that ten year mark by
just a couple of months. Soif I could leave any lasting I know
I threw a lot of different agesand numbers out there, but that ten
(26:15):
years. If you're coming up onten years of marriage and your spouse earned
significantly more than you do, ifyou can make it last that ten years,
that's going to make a huge impacton your retirement, right, And
it's so important to be looking atwhat your post divorce finances are going to
be. I'm also going to addto that is like before you go remarrying,
(26:40):
especially if you're close to drawing SocialSecurity yourself, you really want to
look and see what sort of impactthat's going to make on your benefit.
Absolutely, yeah, thank you somuch for joining us today. I know
that it's hard to keep all theserules straight and there always seems to be
like two or three caveats to everything, but you did an awesome job of
(27:03):
walking us through that. Thank you, and thank you so much for having
me. I appreciate. This ismy guest today as Leah Hadley from Great
Lakes Divorce Financial Solutions. Leah isa seasoned financial professional committed to helping her
clients make wise financial decisions before,during, and after divorce. And you
can tell that she knows her socialsecurity stuff inside out. Leah's website is
(27:26):
Great Lakes dfs dot com. I'llput that link in the show page and
as well as on the blog.And Leah, do you want to give
your download for the financial recovery onemore time? Absolutely, you can get
your free Financial Recovery Guide after yourdivorce dot com. How you divide your
(27:48):
financial assets has a profound impact onyour financial future, and that's why you
should not ignore the social security question. At the very least, you want
to determine if you're likely to beeligible for the divorce Spouses Social Security benefit.
If you're eligible, then it's smartto get some projections for what the
benefit would likely be and then youcan use that in your financial planning.
(28:11):
And you can also use it inthe negotiations for your dividing of your assets.
Getting the information means that you're makinginformed decisions and taking responsibility for your
future. And that's the big takeawayhere. It's about taking responsibility for your
future. I want to thank youfor listening today. If you hop over
(28:33):
to my blog sincem Divorce dot com, you'll find a synopsis of this conversation
and you can follow me at SinceMy Divorce on Twitter and on Facebook.
You can follow Leah on Twitter andFacebook as well at Great Lakes DFS.
I hope you'll join us again nexttime for more conversations about divorce.
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