Dear Carrie: I’m turning 65 in a few months and getting close to retiring. My ex is also turning 65, and as far as I know, he’s still working. I would like to file for my ex-spouse’s Social Security benefits but don’t really want to talk to him about it. Does he have to be involved? — A Reader
Dear Reader: I’m getting a lot of questions about ex-spouses and Social Security lately, so I’m going to try to broaden my answer to yours to cover a few more bases.
The direct answer to your question is no, your ex doesn’t have to be involved for you to collect benefits based on his record — assuming that you qualify under Social Security rules governing benefits for ex-spouses. He doesn’t even have to have filed for benefits himself; he only has to be eligible (at least age 62). As long as he’s eligible to collect, you’re eligible for a spousal benefit.
Your own age plays a part in how much that benefit will be. Once you’re 66, or what the IRS calls your full retirement age, you’re entitled to 50 percent of your ex’s full primary insurance amount, which is the benefit he would get at his full retirement age. So if your ex’s PIA is estimated to be $1,600, at your FRA, you’ll collect $800. But if you collect early, there’s a penalty in the form of a reduction of about 0.7 percent for every month you’re ahead of your FRA. Therefore, collecting at your current age of 65 (12 months early) would permanently reduce your benefit by just over 8 percent. Based on this example, you’d collect about $733.
Unfortunately, if you aren’t in touch with your ex and don’t know his PIA, you won’t know exactly what your spousal benefit will be until you file. The Social Security Administration can’t tell you anything in advance.
Bottom line, the fact that your ex doesn’t have to be involved can be a plus — but figuring out how to maximize your benefit requires a closer look.
Digging Into the Details
Your age, the length of your marriage and your current marital status all factor into whether you qualify for an ex-spousal benefit. I’ve described these in another column, and chances are you’ve read them before, but I think they bear repeating. In a nutshell:
–You must be at least 62 years old.
–You must have been married for a minimum of 10 years.
–If your ex hasn’t yet filed for benefits but is eligible, you must have been divorced for two years.
–You must be currently unmarried.
–If you did remarry, that marriage must have ended.
–If you’re under your FRA, the benefit based on your own work record must be less than the spousal benefit from your ex.
–If you have more than one ex-spouse (with a minimum 10-year marriage), you can collect on either spouse’s record, but not both. Likewise, you can’t collect simultaneously on your own work record and an ex’s. It’s one or the other.
Important Tips About Timing
If you meet these basic qualifications, the next step is to decide when to file. Here’s where it can pay to do some strategizing. To help clarify, let’s look at a couple of scenarios.
Filing before FRA. Helen and John have been divorced for seven years after a 20-year marriage. She wants to collect a spousal benefit on John’s record at age 62 and then switch to her own benefit at her full retirement age.
Unfortunately, this wouldn’t work. When you file for ex-spousal benefits before your FRA, you can’t then switch to your own benefits. Not only that but at age 62, your benefit would be the greater of either your own benefit (reduced because you filed early) or the spousal benefit (also reduced). As you can see, filing before your FRA not only lowers your benefit amount but also limits your options.
Filing at FRA. Todd and Gwen divorced after 10 years of marriage. Gwen remarried, but Todd didn’t. Todd is now 66, and Gwen is 64. Even though Todd’s full benefit is higher than Gwen’s, he wants to collect on her work record and let his own benefit grow until he reaches 70.
This is a realistic strategy. First, Gwen’s marital status doesn’t affect whether Todd can collect on her record; only his own marital status is important. Also, even though Gwen is younger, at age 66 Todd can collect 50 percent of the full benefit she would receive at her FRA. And because Todd is at his FRA, he can choose to collect the spousal benefit now and switch to his own benefit later. Every year he waits to collect on his own work record, he’ll earn delayed retirement credits of about 8 percent until he reaches 70.
As you can see, the main issue is whether you file before or after your FRA. In my opinion, it’s generally best to wait unless you’re in a financial bind. But never postpone a spousal or ex-spousal benefit past FRA, because it maxes out at that age.
An Extra Word About Remarriage and Survivors Benefits
The issue of remarriage can be confusing because the rules are different for spousal and survivors benefits. As I said, you must be unmarried to collect any ex-spousal benefit. However, with survivors benefits, if you remarry after age 60, you can collect on your ex’s record, no matter your marital status. Plus, if you’ve survived more than one spouse, you can choose to collect on the one with the higher benefit — and even switch between them if, for instance, a spouse with a lower benefit dies before a spouse with a higher benefit.
The Social Security Administration does a pretty good job of explaining the details at http://www.ssa.gov. However, if you still have questions, you could look for a financial adviser who specializes in Social Security issues. You don’t want to leave money on the table!
Carrie Schwab-Pomerantz, CERTIFIED FINANCIAL PLANNER ™ is president of the Charles Schwab Foundation and author of “It Pays to Talk.” You can e-mail Carrie at firstname.lastname@example.org.