How to Navigate Social Security in Remarriage

Social Security has a way of making your life decisions difficult. When divorce and remarriage enter the picture, things get very complicated.

The earliest age you can start claiming Social Security benefits is 62. You can also delay taking benefits to any age. If you wait until your full retirement age, which is 66 for the current crop of baby boomers, you receive a larger benefit. If you can get by without the monthly benefits for a few years longer, delaying further to 70 results in a maximized benefit for you.

What complicates the matter is the spousal benefit. When you’re eligible for a spousal benefit, you may take all available benefits (your own and the spousal) at 62 at reduced amounts. Or, if timing is right, you can take your own benefit early and then add the spousal benefit later.

Another choice is to claim the spousal benefit when you reach your full retirement age and maximize your own benefit by waiting until 70.

Since your spouse must file for benefits before you can claim spousal benefits, whether all of these options are available to you depends on your spouse’s age.

Complicating matters further, what if you’re divorced and are now considering a remarriage? If you remarry, you are no longer eligible for any spousal benefits based on your ex-spouse’s record.

This brings up a set of difficult scenarios. You have this new person in your life, but it might be financially advantageous for you to remain unmarried. But if you’re not married, you cannot provide future spousal benefits and survivor benefits for your new love.

I recently dealt with the same situation. Carol, 62, divorced Bob several years ago after a 20-plus-year marriage. Bob, 10 years her senior, has a Social Security record that would provide a significant spousal benefit for Carol – $12,000 per year if she takes it at 66, her full retirement age. She will claim her own benefit at 70. By then it’ll be considerably larger, roughly $31,680 per year.

Source: Thinkstock

Source: Thinkstock

This had been Carol’s plan all along, but then she met Ted, and they were considering getting married. However, Ted has a much smaller Social Security benefit coming to him, around $6,000 per year. A spousal benefit based on Ted’s record would only amount to $3,000 per year. Plus, he’s eight years younger than Carol.

If she marries Ted, Carol cannot receive a spousal benefit based on his record at 66. She also loses the spousal benefit from Bob’s record. But if they don’t get married, Ted would not be able to receive the spousal and survivor benefit based on Carol’s record.

My recommendation to the couple is to delay the marriage until she’s 70, and at the same time, purchase a 10-year level term life insurance policy that is worth the total amount of survivor benefits for Ted.

This way, Carol can receive the spousal benefit based on Bob’s record when she reaches 66 and continue to receive it for four years until she’s 70. For Ted, the insurance policy provides him with a future income resource if Carol passes away before they marry. Ted would be eligible for the spousal and survivor benefit based on Carol’s record one year after the marriage.

In addition, Carol and Ted can get married at any time after Bob dies. Since Carol is over 60, a remarriage doesn’t jeopardize her eligibility for the survivor benefit based on his record.

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Written by Jim Blankenship, CFP, EA. Jim Blankenship is an independent, fee-only financial planner at Blankenship Financial Planning in New Berlin, Ill. He is the author of An IRA Owner’s Manual and A Social Security Owner’s Manual. His blog is Getting Your Financial Ducks In A Row, where he writes regularly about taxes, retirement savings and Social Security.

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