“Gray Divorces” and Social Security

Divorce is not an easy situation at any age. Complications arise involving children, pensions, 401K’s, and the house, but people are not aware of the complications that arise involving Social Security. In many instances, this change of status can jeopardize the retirement security of literally millions of baby boomers.

A recent study, Bowling Green University (2013), states that one in four Americans getting a divorce are 50 years of age or older. Between 1990 and 2010, the divorce rate double in what has been titled the “gray divorce” years.

RULES for Divorced Spousal Benefits:

1. Must have been married 10 years or longer.
2. Claimant must be single.
3. Must have been divorced two years.
4. Both men and women are entitled to this benefit if they meet all the rules and regulations.
5. Must be at least 62 years of age – benefit will be reduced due to filing early.
6. Ex-spouse will not be affected by your claim against his or her benefit amount, in fact, unless you tell them, they will probably not even know that you are receiving this benefit.
7. If taken at the appropriate time, can be 50% of the ex-spouses Full Retirement Age Benefit.

In the first two years after a divorce, an ex-spouse could be caught in “Nowhere Land”. If the ex-spouse has not filed for his/her benefits they must wait two years after the divorce is finalized to claim benefits as an independently entitled spouse. If you turned age 62, prior to January 1, 2016, you can also utilize a Restricted Application for Spousal Benefits and allow your own retirement benefit to grow at 8% per year until you decide to file. But, then again, this might not be the best choice of options. In many cases, clients need to get an income stream coming in as soon as possible and if you find yourself in “Nowhere Land” you might have to take another direction with filing.

We would have to say, that analyzing situations for divorced individuals is the most difficult of our cases. There are so many rules and so many ways to look at your options for filing, and many times there is no communication between the parties to assist in the review. There is no possible way to review these options in a short newspaper article. Suffice it to say, if you find yourself in this situation, you should contact a professional to help you through this maze called Social Security.

Professional advice is simply a phone call away at 601-954-0699 or email us at dthompson@pillarsllc.com or visit our website at www.pillarsllc.com. Roy and Diane are both National Social Security Advisors and Roy is a former CPA of 40 years. We are Corinth, MS residents, but we service clients nationwide.

Posted on by hgasaway

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