Understanding Divorce and Social Security Benefits
Most people want to leave a divorce with a fair settlement that gives them the opportunity to start over with financial security. For older couples, it is important to get a fair settlement allowing both parties to truly get the new start they seek. Social Security benefits are often a major part of future income for these people. Does a spouse in New York state lose all access to their partner’s benefits in a divorce? The answer is complicated.
The Issue Of Social Security Benefits in a Divorce
People approaching retirement age are in a phase of life in which they will be using assets rather than accumulating them. Thus, the division of assets becomes even more important. This can include property, bank accounts, pensions, retirement accounts, and Social Security benefits.
Unlike other assets, Social Security benefits cannot be negotiated or litigated in divorce courts. They also do not vary by state as divorce law often can. There are very specific federal laws that determine who gets what and how much. This law is not negotiable, even in divorce proceedings.
Although this is a larger issue for seniors, it is also important to younger people getting divorced. Everyone should be aware of their future financial situation so they can make other plans accordingly.
Who Can Get Social Security Benefits?
In general, people get Social Security after paying into it over years of work. Spouses of workers also receive benefits because their partner paid into the system. The amount you receive is partially dependent on how much was paid into the system.
When people get divorced, they often lose access to a spouse’s benefits. However, there are a few cases in which a divorced spouse can receive Social Security based on their ex-partner’s payments into the system. In general, you can get benefits if:
- You were married to your former spouse for at least ten years
- You are age 62 or older
- You have not remarried since the divorce
- The amount your spouse is entitled to receive is more than the amount you would get based on your own income and contributions
- Either your spouse is receiving benefits or you have been divorced for more than two years
If all of these factors are true, a person is entitled to some benefits. However, they will not get a full payment but rather up to half of what their ex-spouse is entitled to. If even one of these stipulations is not met, however, the former spouse is only entitled to the Social Security benefits that they have personally earned by working and paying into the system.
How Much Can a Former Spouse Claim in Benefits?
The amount that a person gets in Social Security payments depends on how much they earned and thus how much they paid into the system. Lifetime earnings are important, but income over the past decade is even more so. The amount of monthly benefits payments are determined by a complicated algorithm that becomes even more complicated for divorced spouses. In general, the maximum you can receive is half of what your spouse is entitled to get.
If you claim benefits early (at age 62, for example), you will receive less every month. As with working spouses, it pays off for divorced spouses to put off receiving benefits for as long as possible. People who continue working after they have reached the federal retirement age get additional credits for delaying benefits. If your ex-spouse waits to claim benefits, however, you will not receive their delayed credit. It is always best to defer retirement until you absolutely cannot work anymore.
Planning for Retirement After Divorce
It is important to note that the working spouse will not receive less in Social Security benefits just because an ex-spouse claims them. These are treated as completely separate Social Security cases. However, this is not the case with other types of retirement benefits. The division of retirement accounts, pensions, and savings will lead to both people receiving less than they would have gotten as a couple. Unlike Social Security benefits, these items can be litigated in courts with the hope of getting a larger portion.
In addition, most people will be eligible for Medicare regardless of the amount they can claim in Social Security benefits. Although we tend to lump Social Security and Medicare together, they are separate programs with different rules for claiming benefits.
With an increased number of elderly people getting divorced than ever before, this has become a hot issue in many marriage dissolutions. Although these cases are often contested, there is usually a fair solution to be found. New York state family courts recognize that it is important that neither spouse be left impoverished by a divorce. The right divorce lawyer will ensure that the courts understand your needs and your rights throughout this process.
Special Considerations for Divorcees Approaching Retirement Age
Planning for a retirement during divorce is essential. It is even more crucial for people who are close to this season of life. It is especially important for older Americans considering a divorce to seek expert legal counsel from someone who has experience in this unique area of divorce law. If you are in the Long Island area, contact Long Island Divorce Lawyers today to ensure that your rights and your financial future are protected.