Ask Larry

Can We Get More By Getting Divorced?

Please let me know what you think of this scenario, assuming maximum earnings is the goal. 2 people (husband and wife) exact same age (born 1964), both high earners over many years, 0 children, no disabilities & can afford to wait to age 70. Question 1: Should they get divorced at age 68 in order to earn 2 social security checks (instead of the maximum family benefit)? Question 2: Is there any scenario in which it makes sense to get divorced at age 65 and for one to claim divorced spousal (or their own social security ) between ages 67 to 70 while the other waits to age 70? Thank you!

Divorce won't affect your benefits. You are both too young to collect divorced spousal benefits by themselves starting at full retirement age. Under the new rules, if you turn 62 after January 1, 2016 you are forced (deemed) to take your divorced spousal benefit if you take your retirement benefit and vice versa. Consequently, you'd get what amounts to close to simply the larger of the two benefits. I.e., you'd essentially lose one of the two benefits. Since you are high earners, you would simply get your retirement benefit were you to apply for divorced spousal benefits or, if you stay married, were you to apply for spousal benefits.

If you were both over 62 on January 2, 2016 things would be different. If you were both, say, 64, you could get divorced right now and at 66, after you had been divorced for two years (assuming you were married for 10 years before you divorced) you could both collect full divorced spousal benefits on each other's record and let your own benefits grow through age 70.

best, Larry

May 27 2016 - 8:45pm
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