Retirement 2.0blog

How Social Security treats remarriage

Sometimes it pays to wait to take a second trip down the aisle

May 1, 2017 @ 2:43 pm

By Mary Beth Franklin

Young love is often blind and impulsive. Mature love, on the other hand, is pragmatic and wears bifocals. At least that is my interpretation based on recent questions from arjuna-design readers asking what happens to Social Security benefits for divorced spouses and widows if they remarry.

To claim benefits as a divorced spouse, one must have been married at least 10 years, divorced and currently single. An eligible divorced spouse loses the right to collect benefits on an ex if they remarry. But widows and widowers retain the right to claim survivor benefits if they wait until 60 or later to remarry.

So, a divorced spouse who remarries loses the right to collect benefits on a living ex, but can still collect survivor benefits on a deceased ex if the divorced spouse waits until 60 to take that second trip down the aisle.

(More: 5 financial mistakes divorcing men make)

This was not always the case. Social Security rules on remarriage have changed over time. Before 1965, widows lost eligibility for survivor benefits if they remarried at any time. Beginning in 1979, widows (but not surviving divorced widows) could remarry after age 60 and still claim a full widow benefits. It wasn't until 1984 that the same right was extended to surviving divorced spouses.

But, of course, there are exceptions to the rule. This is Social Security, after all, which has more than 2,700 rules governing benefits, and it seems half of them are exceptions. Here's one exception spelled out in the Social Security Administration's Program Operations Manual System, the ultimate arbiter of the agency's rules.

The marriage of a divorced spouse will terminate entitlement to such benefits unless the divorced spouse marries someone who is also entitled to benefits as an ex-spouse or widow(er). In other words, if two people who are each collecting Social Security benefits on a former spouse's earnings record, they can each keep those auxiliary benefits when then remarry.

(More: Social Security rules for the twice-widowed client)

Hoan Taussig, a financial adviser with Timothy Financial Counsel in Wheaton, Ill., had some pragmatic questions about how to advise her client, a 62-year-old divorced spouse, about whether and when she should remarry. The client has a small Social Security benefit based on her own earnings record. Both her ex-husband and her potential future husband are high-earners with substantial Social Security benefits.

"My client is looking to get remarried but is willing to delay or avoid marriage altogether if it hurts her Social Security benefits," Ms. Taussig wrote to me in an email. "If she doesn't get married, can she elect spousal benefits on her ex's record when she reaches her full retirement age in three years?" she asked. "If she later decides to get married, can she keep the ex's spousal benefits?"

Because Ms. Taussig's client was born after Jan. 1, 1954, she will never be able to claim only spousal benefits when she reaches her full retirement age and allow her own retirement benefits to continue to grow by 8% per year up until age 70.

In her case, she will be paid the highest benefit to which she is entitled — whether on her own record or as a spouse — based on her age at time of claim. Assuming she waits until 66 to claim Social Security, she will receive a benefit worth half of her ex-husband's full retirement age amount. Her benefit will consist of her own retirement benefit topped off by the excess spousal amount, bringing the combined total up to 50% of her ex's full retirement age benefit.

(More: 5 financial mistakes divorcing women make)

But once she remarries, she will lose her spousal benefits — unless the person she marries is also receiving benefits as an ex-spouse or widower.

However, because she waited until after she turned 60 to remarry, she would retain the right to collect survivor benefits if her ex dies, even if she is married to someone else. Although she can only collect one Social Security benefit at a time, she can choose the largest one. Later, if a larger benefit becomes available, she can switch to the larger benefit.

If the client decides to remarry, she must be married at least one year before she would qualify for spousal benefits on her new husband's earning record. And he must be collecting his Social Security benefits to trigger her benefits as a spouse. Since she plans to wait until her full retirement age of 66 to claim Social security, she could collect benefits on her own earnings record and once her new husband claims benefits, she can step up to a larger amount.

But if he waits until 70 to collect his benefits according to his current plan, her spousal benefits will still be based on his full retirement age amount, as spousal benefits do not qualify for delayed retirement credits. But if her new husband dies first, her survivor benefits would be worth 100% of what he was collecting or entitled to collect at time of death, including any delayed retirement credits.

(Questions about new Social Security rules? Find the answers in my .)

Mary Beth Franklin is a contributing editor to arjuna-design and a certified financial planner.

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