Strategies for Divorced Seniors to Amplify Their Social Security Payments: Real-Life Example
Boosting Retirement Income with Social Security Divorced Spouse Benefits
Susan, a 71-year-old divorced individual, stands to gain a substantial increase in her monthly income by claiming Social Security benefits based on her ex-husband Robert's work record. This opportunity, known as Social Security divorced spouse benefits, can provide a significant financial boost for those who meet the eligibility criteria.
To qualify, Susan must have been married to Robert for at least 10 years, be at least 62 years old, currently unmarried (with some exceptions), and have a lower Social Security benefit than what she could receive as a spouse. If all these conditions are met, Susan can receive up to 50% of Robert's Primary Insurance Amount (PIA), which is the retirement benefit amount he will receive if he collects at his full retirement age (FRA).
In Susan's case, Robert's Social Security benefit is $4,873 a month, an increase of 32% above his PIA if he had collected at FRA. This means that Susan could potentially receive up to $1,846 a month as a divorced spouse benefit, which is higher than her current retirement benefit of $890 a month and her PIA of $1,187.
If Susan chooses to collect the spouse benefit at her FRA or later, she can receive the maximum benefit of 50% of Robert's PIA, amounting to $1,549 a month. If she had filed for both benefits at her FRA, her fully payable spouse "top-off" amount at FRA would be $659.
However, Susan should act promptly at each stage, as there are specific time limits for filing appeals. If she collects the spouse benefit at her FRA or later and it is greater than her own retirement benefit, she can receive the maximum spouse benefit. Additionally, she can ask for up to six months of retroactive benefits to partially recover the lost income from the delayed claim.
To initiate her claim for divorced spouse benefits, Susan should contact the Social Security Administration (SSA). She should gather required documentation, including her Social Security number (SSN), proof of her marriage and divorce, Robert's birthday, place of birth, and SSN if available.
The rules governing these benefits and their amounts are complex and can have a significant impact on retirement finances. Understanding Social Security divorced spouse benefit rules and consulting with subject matter experts can help optimize Social Security benefits.
For example, Susan can strategically time her claim to maximize her benefits. Spousal benefits max out at her full retirement age (FRA); waiting past FRA does not increase divorced spouse benefits, so claiming at FRA or soon after if it is higher is optimal. If she is eligible for survivor benefits (e.g., if the ex-spouse dies), she may strategically claim benefits in a sequence to maximize lifetime income.
In summary, to optimize Social Security divorced spouse benefits, carefully assess your and your ex-spouse’s benefit amounts, claim at the appropriate age (not before 62, ideally at or after FRA for full benefit), and strategize your claiming sequence considering survivor benefits and your employment status. Using Social Security calculators or consulting a financial advisor can help tailor the best claiming strategy for your situation.
[1] Social Security Administration [2] AARP [3] Forbes [5] Investopedia
- Proper planning in personal-finance can help Susan maximize her Social Security divorced spouse benefits, as strategically timing her claim, considering her and her ex-spouse's benefit amounts, and taking advantage of survivor benefits can lead to a higher lifetime income.
- If Susan is eligible for both Social Security retirement benefits and divorced spouse benefits, understanding thecomplex rules governing these benefits can help ensure she claims the proper combination to receive the highest possible monthly income, thus boosting her personal-finance situation significantly.
