How Social Security Benefits are Affected by Divorce

The way the social security benefits are affected by divorce may be overlooked until an ex-wife reaches the age of eligibility for benefits. This is a common oversight of fiscal negotiation in divorce, but being informed can better prepare you for that time.

What is Social Security and Who is Eligible?

Social Security, in the United States, is a supplemental retirement system based on contribution throughout one’s working life. The original intention of the system was to establish a minimum level of financial stability for American retirees. The system has come under much criticism and speculation in recent years, but it still remains a resource for the elderly after they retire. The payout to those who are over the age of 65 is relative to the number of years they worked and the amount of wages they earned.

How Social Security Benefits are Affected by Divorce

The benefits one earns in Social Security are based on one’s entire working life, which is statistically lesser for women due to unemployment periods resulting from children and homemaking. When a spouse becomes eligible for Social Security, benefits are calculated based on the total earnings of the couple. This helps to offset periods of career-sacrifice on the part of one spouse. After a divorce, the spouse who spent the majority of their adult life in a stay-at-home capacity could be subject to a dramatic reduction in benefits. This possibility is scary for women since one in five over the age of 65 receive income only from Social Security. In addition, the benefits for women are typically 25 percent lower than the benefits for men. Clearly, it is important for a woman to make informed decisions on this issue regardless of her age at the time of divorce. Ignoring this issue could drastically reduce her benefits later.

What Should You Do?

It is important to be aware of how decisions between the time of your divorce and the time of your eligibility for Social Security can affect your benefits directly. If a woman decides to remarry, her benefits may not be affected if she marries someone who is also receiving Social Security benefits as a dependent of a wage-earner.

If you are a divorcee who was not the primary household wage earner, it is important for you to be prepared to file an appropriate claim for Social Security benefits. Your ex-spouse’s Social Security number will be needed to file the claim.