Confusion About Divorced Benefits

Posted on January 3, 2020 by hgasaway Leave a comment

If you were married 10 years or longer, are currently single, having been divorced for two years, were born on or before January 1, 1954 and have not filed for your Social Security benefit, this article is about you and for you.

Divorced spouses, if they fall into the category above, have more claiming options than their married counterparts. One of the spouses in a married couple can file a Restricted Application for Spousal Benefits, if born on or before January 1, 1954. But the other party has to have filed for their benefits in order for this strategy to work.

This is not true with divorced couples. As long as your marriage lasted 10 years, has been legally dissolved over 2 years, each are still single, then each party is considered to be “independently entitled” spouses. What does this mean? It means that if both spouses are at least 62 years old, they can claim Social Security benefits on an ex’s benefits record even if the ex-spouse has not yet claimed benefits. So, the other benefit is that while the divorced spouses that qualify are filling off their ex-spouses’ benefit, their benefit is growing by 8% per year until they decide to file.

When did these rules change? Before 1985, divorced spouses were subject to the same requirement as a current spouse. That is, the worker had to apply for Social Security before a benefit was made available to his or her divorced spouse. It was determined by Congress that many ex-spouses were holding grudges against their former spouses and to keep them from applying for benefits off of their records, thus they were waiting until later to file instead of sooner. This caused great hardship for many ex-spouses, usually women. Instead of allowing these ex-spouses to have to file for public assistance and eliminating them being held hostage to their ex-spouses filing decision, the law was changed.

Now, if over age 62, and meeting all the other age and length of marriage and divorce requirements, this exception is in place for those that qualify.
Pillars LLC is in the Corinth, MS area but service all 50 states. Roy and Diane are both National Social Security Advisors and Roy is a former CPA of over 40 years. You may contact them at dthompson@pillarsllc.com, on their website at www.pillarsllc.com or call at 601-954-0699. KNOW before you GO!!


What Do You Really Know About Social Security Laws?

Posted on April 23, 2016 by hgasaway Leave a comment

Roy and I have found with talking to people each day, even the most basic knowledge about Social Security is not understood. With all the articles on the internet, some good and some bad, people are just confused and basically give up educating themselves. They drive to the Social Security office and just take what they are given. This does not have to be the case. Remember, the Social Security office will give you information on your benefit only…..not advice on how to file collectively and improve your income position.

In this article, we are going to define some of the more elementary terms related to Social Security:

  1. Cumulative Benefits – lifetime payout of Social Security benefits.
  2. Delayed Retirement Credits – 8% increase in your benefit amount per year, for every year you wait to file after your Full Retirement Age. This is actually calculated monthly, so you do not have to wait an entire year.
  3. Delayed Strategy – claiming benefits after Full Retirement Age (FRA) in order to receive increased benefits.
  4. Divorced Benefits – benefits paid to the divorced spouse of an eligible worker to whom you were married at least 10 years – must comply with the new law changes effective November 2, 2015.
  5. Earnings Record – the history of your earnings for the years you have worked during your lifetime.
  6. Earnings Test – the reduction in benefit taken if you continue to work while receiving benefits before you reach Full Retirement Age (FRA). Once you reach FRA, the earnings test no longer applies, and there is no limit on your income. The year your turn FRA, the Earnings Limitations amount is substantially higher.
  7. Primary Insurance Amount – (PIA) is the benefit you will receive at your FRA.
  8. Windfall Elimination Provision (WEP) – a provision that may reduce Social Security benefits based on your earnings history if you are eligible to receive a pension from work not covered by Social Security taxes.
  9. Survivor Benefits – benefits paid to the surviving spouse of a deceased eligible worker.
  10. File and Suspend – a Social Security policy allowing a worker to file an application for retirement benefits but immediately suspend payments. This makes the worker’s spouse eligible to file for and receive spousal benefits. This also allows the worker’s benefit to accrue delayed retirement credits. However, the Bi-Partisan Budget Act of 2015 has altered this policy. Effective April 30, 2016, File and Suspend will no longer exist.

This is truly only a fraction of the many rules and regulations (2,827) that encompass the Social Security law. And, all of these laws carry exceptions to the rules. Most people that take their taxes to be done by an accountant or CPA have a better end result…..because these professionals are versed in the law and know the exceptions to the rules. This is also true of your Social Security Benefit. This is a benefit that will be with you the rest of your life, so have it professionally reviewed for the best end result.

Please visit our website at www.pillarsllc.com or email us with any questions at dthompson@pillarsllc.com. You may also call Pillars (Roy and Diane Thompson) at 601-954-0699 with any questions you may have. We enjoy what we do and love to help people better their Social Security benefit.