Divorced Spouses & Social Security Retirement Benefits
Divorce cases always have a financial component. In rare instances, the parties have so much money coming in, there is no real concern about how everyone will make "ends meet." But in most cases, how incomes and expenses are divided, as well as considerations about the future, play a large role in negotiations and litigation.
Consider for a moment: Would you agree to a divorce settlement that you knew would leave you unable to survive? Would you agree to a settlement that left you with little or no income or retirement savings for the future? Most people, if given the choice, would answer 'no.'
Often however, the choices are not 'yes' or 'no' but rather, how can I survive financially? One component of retirement for many people is their eligibility for Social Security retirement benefits. Social Security provides a retirement benefit for workers who have contributed a minimum number of working years to the program. The amount of money paid into the program (involuntarily!) impacts how much of a retirement benefit is paid at the worker's 'full retirement age.'
Spouses of workers can also qualify for benefits based on their spouse's work record. Up to 50% of the benefit received by a worker can be received by the worker's spouse.
E.g.: Samuel worked for 40 years, and have earned a Social Security retirement benefit of $2,000.00 per month. Samuel's wife, Nora, worked only seasonally and primarily concerned herself with raising the couple's children and maintaining the family home. Nora does not have enough work credits to qualify for Social Security retirement benefits on her own. Nora may still benefit from the Social Security program, however. Nora can file for benefits as the spouse of Samuel, and receive up to $1,000.00 (50% on Samuel's benefit of $2,000.00). [Note: the numbers used are demonstrative and do not reflect actual benefits or estimates of benefits for real people.]
People who are contemplating a divorce or are already divorced should understand: marriage for 10 years or longer entitle divorced spouses to elect to receive spousal benefits under the Social Security retirement program. This election does NOT impact the worker-spouse.
This spousal entitlement is very important in many divorce cases, as it may greatly impact the calculation of the parties' expected income and future financial picture.
To learn more about this subject, please visit the Social Security Administration website, and this .PDF created by the Administration to discuss Retirement Benefits.
If you are contemplating divorce, or would like to better understand the interplay between Michigan's divorce laws and retirement, consider scheduling an appointment for a free family law consultation. My website can be found at: www.guilfordlaw.com.