Heymann & Fletcher

Age factors into Social Security benefits and divorce

Many New Jersey spouses are aware that they are entitled to claim Social Security benefits based on the earnings record of a former spouse. However, new rules have changed the way in which those benefits can be claimed. Understanding those changes can help spouses make divorce decisions that are in their own best interests.

Individuals who were born prior to 1954 will have a choice when it comes time to file for Social Security benefits. They can choose to either file based on the earnings record of their former spouse, or on their own earnings record. If they choose to receive spousal benefits, their own retirement benefit will continue to grow until they reach age 70. That can mean substantially more retirement income over the course of time.

However, new rules state that individuals born during or after 1954 will not have the ability to choose which benefit to claim. When the time comes to begin claiming Social Security benefits, they will be required to file for all available benefits. They will be paid the higher amounts, whether that is based on their own earnings record or that of a former spouse.

Understanding how these changes could impact retirement income is an important component of planning for divorce. For some New Jersey couples, both sets of rules will apply, depending on the age of each party. It is important to take the time to work through how Social Security benefits will eventually come into play. Doing so can help spouses make the best possible property division choices to support a strong financial future.

Source: investmentnews.com, "New Social Security rules and divorce", Mary Beth Franklin, Nov. 15, 2016

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