Although divorce severs many financial ties between former spouses, a marriage lasting 10 years or more provides for some Social Security benefits under an ex-spouse’s earnings record. A spouse or ex-spouse is entitled to half of the other party’s benefit amount without any impact on that person’s own benefit. It may be tempting to tap into this resource prior to reaching the full retirement age of 66, but Virginia residents may want to consider this action carefully based on their current and future employment plans.
The Social Security Administration adjusts benefits based on work-related earnings in a given year. If an individual claims spousal benefits prior to reaching full retirement age, a low limit applies to one’s wages before this withholding is initiated. If full retirement age has been reached, the earnings limit is more than twice as much. Earnings that exceed the limit in either situation are subject to federal withholding.
In planning strategically to access spousal benefits, one of the most sensible strategies is to wait until reaching full retirement age to request the spousal credit. Meanwhile, one’s own retirement benefit increases by approximately 8 percent for each year beyond full retirement age that a claim is delayed. At 70 years of age, an individual’s personal benefit will have reached its maximum. An individual will typically want to claim the benefit that provides the higher amount of income. For many, the full personal benefit at age 70 will exceed the spousal benefit, making it wise to adjust one’s claim.
An awareness of Social Security guidelines may be beneficial to an individual who is considering the end of a marriage that has lasted almost 10 years. A lawyer might point out that waiting to file for divorce could allow for eventual access to these spousal benefits.