Financial News – UP2DATE News from Advise Financial
14 de September de 2023
Todo lo que debes saber sobre el Social Security y el divorcio
15 de September de 2023
James and Mary’s story of their Social Security and Divorce
4 out of 10 people are unaware that divorced people can receive Social Security benefits from their ex-partner.
The Social Security benefit is little known and can be difficult to understand due to its complex terms.
Therefore, I have created a fictional story to explain how Social Security works in divorce cases.
Our story begins with James and Mary (incidentally, the two most common names in the U.S. according to Social Security over the last 100 years).
They met years ago and felt an affinity, so they decided to get married, and they have been married for more than 30 years.
As time went by, their love for each other began to fade, and their differences became more apparent. So they decided to put an end to their marriage and divorced.
Unfortunately, it was a not-very-friendly process where both decided not to talk to each other again.
During their marriage, they both worked. Mary stopped working for a while to devote herself to her children. This resulted in a lower salary than her husband, James.
Recalling that some 30 years ago, the wage gap between men and women was greater than it is today.
Mary, therefore, made smaller contributions to her Social Security. James was able to contribute more during all these years because he had a higher salary and no interruptions.
Years later…
As the years went by, James got a partner, they started dating, and he got married. Mary decided that she did not want to marry again.
One day, a friend was talking to Mary; she told her that she was reviewing her finances with a Certified Financial Planner named Alonso; and he told her that divorced people can benefit from their ex-partner’s social security.
Upon hearing this information, Mary first thought she didn’t want anything from James anyway. But her friend reminded her of those years she spent caring for her children and earning no income.
She started thinking about this information. Mainly because she is 62 years old and feels that the inflation of the last few years makes everything more expensive.
The next day she decided to ask her friend for the Financial Planner’s contact. She thought that she didn’t have an investment portfolio. And surely, there would not be much interest on the part of the planner to serve her.
Her friend told her that their financial planners they work by the hour, like an accountant or a lawyer. And they charge for the time or request you make, not the amount of money you have.
Mary decided to go to the Certified Financial Planner, and upon arriving at the meeting, the first question she asked was:
Mary: If I am over 62 years old, can I receive my ex-partner’s Social Security pension benefit?
Alonso: Correct, as long as your marriage has lasted more than 10 years and you have not remarried.
Mary: If I start taking this benefit, will my ex-partner know, or will it affect the benefit he/she will receive?
Alonso: He would not find out, and it does affect the amount he will receive in the future. By the way, it doesn’t matter if he hasn’t applied for his social security pension yet. You can ask for it as long as he is already 62 years old or older.
In addition, the benefit you will receive does not affect the amount your current spouse will receive.
You can apply for this Social Security Divorce benefit by visiting the Social Security website. By calling 800-772-1213 or visiting your local Social Security office.
Mary: What would happen to this one if I decide to remarry and I am receiving alimony from my ex-partner?
Alonso: You would lose the benefit if you remarried. As you can see, it matters if your ex-partner remarried.
There are cases in which you could continue to receive this benefit. If you do not remarry and if your ex-partner should pass away, but hopefully not.
In the event of such an occurrence, you would receive 100% of the benefit he was entitled to receive (the amount he would receive depends on age).
And instead of asking for it at 62, you could have asked for it at 60.
It is important to know that. If you were already receiving your Social Security retirement benefit, you will not receive both amounts. Yours and your ex-partner’s, but you will receive the higher of the two.
Mary: How much am I going to receive? Is it good for me to ask for it now at age 62?
Alonso: There are many factors to take into consideration to give this answer. But let’s assume that you are not working and have no other sources of income. An ex is entitled to receive 50% of the amount that would correspond to her ex when she reaches her retirement age.
Now, if you ask for it at 62, you will receive less than if you ask for it at 67 or at your retirement age. Click here for more information on this topic.
So you can have a general rule of thumb in those cases where you can already claim your Social Security retirement benefit. If your ex-partner’s amount is higher, they will give you the differential to reach that amount.
Mary went on to ask many more questions. But our idea is that with this fictitious story, you could get an idea of what you should know about Social Security and the benefit in case of divorce.
We hope this information is useful, and if you wish to have more information, here are some useful links:
The United States Social Security Administration | SSA
Founder & CEO Advise Financial
Alonso is a “CERTIFIED FINANCIAL PLANNER™” who is dedicated to increasing the Financial Well-being of nurses, physicians and successful immigrants in Florida and Texas. With more than 20 years of experience in the world of finance, always working for the best interest of his clients, under fiduciary criteria.
