Part One of this blog discussed your possible entitlement to Social Security benefits based on your former spouse’s earnings record instead of your own earnings record. Being entitled to collect Social Security benefits on a former spouse’s earnings record does not automatically mean that it is the best financial planning idea. Many factors come into play.
First, even if you wait until your full retirement age to collect benefits, you are only entitled to receive 50 percent of your former spouse’s full benefit. If you apply before your full retirement age, that amount will be further reduced by more than 30 percent of your former spouse’s full benefit if you apply as soon as you are eligible at age 62.
Another important consideration in applying before you reach your full retirement age is whether your benefits based on your own earnings record are higher than the benefits you would receive based on your former spouse’s earnings record. Social Security will pay you based on your own earnings record if your own benefit is the higher amount.
If you are entitled to a higher benefit based on your former spouse’s earnings record, you will receive your own benefit amount plus the difference between your own benefit amount and any higher amount you are entitled to based on your former spouse’s earnings record. But if you have reached your full retirement age under Social Security guidelines, you can choose whether to delay your own benefits and collect on your former spouse’s benefits, even if the benefits are lower than your own benefits.
Electing this option at your full retirement age means that your own benefits will increase by 8 percent every year you delay them up until you reach age 70. In the meantime, you will be collecting 50 percent of your former spouse’s full benefit amount. Even if your former spouse elected to take reduced benefits at an earlier age, your 50 percent entitlement will be based on your former spouse’s full retirement benefit amount. If you can afford to wait to claim
If you are considering divorce or you are already divorced and you are in or approaching the age range for Social Security benefit eligibility, it is important to understand your entitlement rights. Any income received from Social Security benefits based on either your or your former spouse’s earning record is considered income for alimony determination/modification purposes.
If you need more information, contact the Law Office of Jeanne Coleman to arrange a free 20-minute consultation. For over twenty years, Jeanne and her highly experienced staff disability cases in in the Tampa Bay community.
