Most Florida spouses are aware that they have the right to claim a Social Security spousal benefit against the work record of their husband or wife. This gives them the ability to delay making their own claim until their benefits have reached the maximum level, at the full retirement age of 70. That said, few individuals realize that they may also be entitled to a spousal benefit based on the earning of their former husband or wife, as long as certain conditions are met. This creates a unique family law issue for some spouses who are considering filing for divorce.
In order to have the ability to claim benefits based on the work record of an ex, the marriage must have lasted for a duration of at least 10 years. For spouses who are preparing to divorce but are not quite at that 10-year threshold, it may make sense to delay the process until that date has passed. Doing so can yield a significant financial reward during retirement.
If a spouse waits until the age of 66 to begin claiming against the earnings of a former husband or wife, the monthly payment received will be close to half of what the former spouse is expected to receive. It is possible to begin this process at the age of 62, but spouses who do so will receive only around 70 percent of what they could gain at the age of 66. It is important to note that no matter when a claim is filed, the former spouse loses nothing in the process and will be able to claim his or her full Social Security benefit regardless of whether an ex is taking advantage of the spousal benefit.
Best of all, claiming against the work record of an ex can give an individual the ability to delay making a claim against his or her own earning record. This allows those benefits to grow in value, until they max out at age 70. By using this strategy, an individual could receive many tens of thousands of dollars more than simply pursuing their own claim at the earliest possible age. In this way, Florida spouses who are preparing to divorce should assess whether they are close enough to the 10-year mark to make a family law delay worthwhile.
Source: Time, “How to Collect Social Security Benefits Based on an Ex-Spouse’s Earnings“, Philip Moeller, June 5, 2015