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Retirement Planning > Social Security > Claiming Strategies

Social Security Claiming: The Classic Case of Divorce

By John Manganaro

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This is the latest in a series of biweekly articles featuring Social Security claiming case studies drawn from the ALM publication “2024 Social Security & Medicare Facts,” by Michael Thomas with support from Jim Blair, a former Social Security administrator, and Marc Kiner, a planning expert with extensive experience in public accounting.

The Scenario: Divorced and Single

Kathy is a divorced woman who was married to her ex-husband, Jose, for over 10 years, and they have been divorced for over two years. Neither member of the couple has remarried.

Both Jose and Kathy have their own earnings and are eligible for a benefit from their own work record. Both have reached their minimum claiming age of 62, having been born in 1962, and both have filing options independent of the other.

Under the law, Jose and Kathy are able to elect benefits six months retroactively from when they make their filing decision. Given their respective earnings histories, Kathy is eligible for benefits from Jose’s record as a divorced spouse regardless of the filing status of Jose.

Both Jose and Kathy have a full retirement age of 67, and they can both choose to delay claiming to the maximum benefit age of 70. In this scenario, Kathy expects to live to 87.

What the Numbers Say

Given her status as a now-single divorced person with a past marriage that lasted at least 10 years, Kathy has three primary claiming strategies to consider. The difference in total benefits between the most and least optimal choice is significant — about $30,000.

The least effective strategy would see Kathy file in August 2024 for her own reduced benefit amount of $705. She could also file at that time for a reduced spousal benefit of $87. Later, Kathy would then expect to collect a full widow’s benefit of $2,270, giving her a total lifetime benefit projection of $285,794.

A slightly better option would be for Kathy to wait until 2032 to file at age 70 for her own maximum worker’s benefit of $1,242. She would again expect to eventually collect a full widow’s benefit of $2,270. This approach would deliver a lifetime projected benefit of $290,204 — or about $5,000 more than the early claiming scenario.

The best approach, according to the authors, would be for Kathy to file in July 2029 at age 67 for her full worker’s benefit of $1,002. She could also file at that time for a full divorced spousal benefit of $133, and she would once again expect to collect a widow’s benefit of $2,270 for the last two years of her retirement projection.

This strategy would deliver $312,125 in projected lifetime benefits, or about $20,000 more than the second-best claiming strategy.

Key Concepts

As outlined in Kathy’s case study, an ex-spouse who wants to claim spousal benefits must have been married for at least 10 years.

The couple must have been divorced for two years, or the ex-spouse must already be claiming Social Security. Also, the ex-spouse must not have remarried, but if the “new” spouse and the ex-spouse are both dead, a person can claim the highest benefits of either.

Generally, the ex-spouse making the claim will get 50% of the former spouse’s primary insurance amount, regardless of when the former spouse claims Social Security. In other words, the ex-spouse will get half of what the former spouse’s benefit would be at full retirement age.

Another important concept is that the spousal benefit amount “tops up” the claiming spouse’s own benefit. If, for example, an ex-wife’s Social Security benefit is $1,000 a month, and her ex-husband’s benefit at full retirement age is $2,400, she is eligible for a $1,200 spousal benefit.

In practice, the ex-wife will get an additional $200 because the benefit figure for her ex yields a bigger benefit for her. But she doesn’t get both, i.e., her $1,000 own plus $1,200 from the ex-spouse’s benefit.

John Manganaro

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