With 50% divorce rates in America, (higher for subsequent marriages) matrimonial attorneys and divorce mediators are busy. As part of the settlement, their financial check list probably includes updating investment beneficiary forms including: .
- IRA and 401(k)accounts
- Life insurance policies
- TOD (transfer on death) investment accounts
- Annuity contracts
There’s one more item to look into which your attorney may have neglected to explain; your social security benefits. This is true even if your ex- spouse has not yet applied for benefits.
The information below can be found on the Social Security Administration web site. Here’s the readers digest version.
If you are divorced, but your marriage lasted 10 years or longer, you can receive benefits on your ex-spouse’s record (even if he or she has remarried) if:
- You are unmarried.
- You are age 62 or older.
- Your ex-spouse is entitled to Social Security retirement or disability benefits.
- The benefit you are entitled to receive based on your own work is less than the benefit you would receive based on your ex-spouse’s work.
Your benefit as a divorced spouse is equal to one-half of your ex-spouse’s full retirement amount (or disability benefit) if you start receiving benefits at your full retirement age.
If you remarry, you generally cannot collect benefits on your former spouse’s record unless your later marriage ends (whether by death, divorce or annulment).
If your ex-spouse has not applied for retirement benefits, but can qualify for them, you can receive benefits on his or her record if you have been divorced for at least two years.
If you are eligible for retirement benefits on your own record and divorced spouse’s benefits, we will pay the retirement benefit first. If the benefit on your ex-spouse’s record is higher, you will get an additional amount on your ex-spouse’s record so that the combination of benefits equals that higher amount.
If you continue to work while receiving benefits, the retirement benefit earnings limit still applies. If you are eligible for benefits this year and are still working, you can use our earnings test calculator to see how those earnings would affect your benefit payments.
The amount of benefits you get has no effect on the amount of benefits your ex-spouse or his or her current spouse may receive.
Want a fun way to keep your spouse happy? Try dancing!
Please note: BH Wealth does not provide tax or legal advice. Please speak to your legal and tax professionals.