Most advisors know some of the basics when it comes to maximizing Social Security benefits for clients, even for those who are divorced. In a recent “Ask Carrie” blog posting on Schwab.com, however, Carrie Schwab-Pomerantz addresses some of the nuances around divorce and Social Security’s old age and disability benefits: who can file, when you can file and what the actual benefits are that an ex-spouse can receive.
Delivered in a Q&A format, Schwab-Pomerantz’s first question comes from a woman who is nearing 65, as is her ex-husband. She wants to know whether she has to contact her ex-husband before filing for the benefits owed to her. The reader is clear: she does not want to contact him.
Schwab-Pomerantz, a certified financial planner, responds by saying that, assuming she meets the marriage and divorce rules, the woman need not involve her ex-husband in the process.
“He doesn’t even have to have filed for benefits himself,” says Schwab-Pomerantz, president of The Schwab Foundation and chairwoman of Schwab Charitable. The ex-husband “only has to be eligible (at least age 62). As long as he’s eligible to collect, you’re eligible for a spousal benefit.”
She then points out that what will affect the reader’s benefits is the age when she files: “if you collect early, there’s a penalty in the form of a reduction of 25/36 of 1% for every month you’re ahead of your FRA,” or full retirement age. So if the reader starts collecting at her current age of 65, or 12 months before her FRA of 66, it “would permanently reduce your benefit by just over 8%.”
However, Schwab-Pomerantz notes that if the woman doesn’t know her ex-husband’s PIA — his Primary Insurance Amount, which is the benefit he will be entitled to at his FRA — “you won’t know exactly what your spousal benefit will be until you file. The Social Security Administration (SSA) can’t tell you anything in advance.”