A Wife Is Left by Her Husband. How Can She Claim on His Social Security?

We get married thinking we will have a wonderful life.  Some couples do, but others find themselves in difficult situations.

Regardless of a client’s marital situation, a common thread is that Social Security decisions from one spouse can have dramatic implications on the other. Add in a divorce and the rules get more complicated.

How to Fine-Tune Your Client's Social Security Claiming Strategy

In the case of “Tammy,” who wrote to me recently, her financial life was turned upside down when her husband of 32 years suddenly left and froze their accounts.

A Particularly Difficult Situation

Just months before turning 62, Tammy’s husband, 10 years younger, left their house and never returned. She found out quickly that their credit cards had been canceled and the bank account emptied.

This was a shock to Tammy. She had retired a year earlier and now had no income. She knew she could access Social Security at age 62 and needed to tap her benefits early.

It took well over a year for the divorce to settle. By age 65, she was barely hanging on financially and decided working full time was necessary. Today, she’s 69 and still working.

Paying Into Social Security When Receiving Benefits

Tammy’s first question was why she had to keep paying Social Security and Medicare when she’s receiving benefits.

As long as Tammy earns wages at a covered employer, the employer is required to pay FICA taxes. There is no exemption when working and collecting benefits.

Since reaching her full retirement age (FRA) in 2018, she can earn any amount of income and still receive her reduced benefit with no clawbacks, though payroll taxes reduce her paycheck.

Furthermore, Social Security recalculates her benefit each year she works. If her current wages are higher than those used to calculate her Primary Insurance Amount (PIA), her benefit amount would increase.

What Can She Get on Her Ex’s Work Record/?

Tammy’s next question was about options for claiming on her ex. She’ll be 70 in 2022 and is unhappy that she’s still receiving a reduced benefit that is further shrunk by Medicare Part B premiums. Tammy heard she might be eligible for additional benefits on her ex’s record once she’s 70.

She provided little information, so this was a situation of connecting the dots in reverse. First, estimating her PIA is important to see if she’ll have any options as an ex-spouse:

• She said her reduced benefit is “about $850” per month.
• Based on her current age, her birth year is 1952, so FRA is 66.
• Claiming at 62 means a full 25% reduction.
• Backing into her PIA results is about $1,130 per month.

Next, Consider the Divorce Rules

There are five major Social Security rules for divorced people. First, the exes must have been married for 10 consecutive years or longer. If so, the divorce must be final for two years or longer and the receiving ex cannot be remarried. Tammy checks the first three boxes.

In her case, the glitch comes with the age rule. For either ex to collect on the other, each of them must be at least age 62. Tammy’s ex is 10 years younger, so when she turns 70, he’ll be 60. There is no option for Tammy to collect on his record.  Yet.

The fifth rule is that the ex-spousal benefit must be higher than your own benefit. The maximum ex-spousal payment is 50% of the other’s PIA. In Tammy’s case, her ex’s PIA must be higher than $2,260 (her PIA of $1,130 x 2).

Tammy’s Possible Option for the Future

In 2024, Tammy’s ex will reach 62. At that point, she can meet with Social Security to see if there is a possible ex-spousal top-up available to her.

Let’s say his PIA is $2,600. Tammy’s calculated benefit would be $1,300 per month. But she won’t receive that much. Her ex-spousal top-up is $170 ($1,300 – $1,130). The top-up will be added to her reduced benefit ($850 + $170 = $1,020) and her total is substantially less than it could have been.

While this was not great news for Tammy, in the end, more is more. That additional $170 top-up will offset some of her Part B premiums for many years.

Come back next time as Tammy asks about remarriage and her benefits.

Marcia Mantell is the founder and president of Mantell Retirement Consulting Inc., a retirement business development, marketing & communications, and education company supporting the financial services industry, advisors, and their clients. She is author of “What’s the Deal with Retirement Planning for Women/?” and “What’s the Deal with Social Security for Women?” She blogs at BoomerRetirementBriefs.com.