Virtually everyone understands the importance of making solid financial decisions during the course of a divorce. However, one aspect of divorce that is often overlooked by Florida spouses is the need for proper timing. The timeframe for filing and finalizing a divorce can be critical in certain circumstances, especially when it comes to Social Security benefits.
Spouses who were born prior to 1954 and who divorced after 10 years of marriage are able to claim spousal benefits on their former spouse's Social Security earnings. This allows them to let their own retirement benefits grow, a process that continues until the age of 70. They can begin claiming spousal benefits at the age of 66. Doing so does not alter the former spouse's ability to claim his or her own benefit.
Younger spouses, however, will no longer be able to choose which benefit they should claim. Those born in 1954 or later will need to file for any available benefits at the time they begin claiming Social Security. They will receive the higher of available benefits, either their own or that of their former spouse.
When it comes to filing for divorce, timing can make a world of difference. Florida spouses must understand that in order to claim Social Security benefits based on a former spouse's earnings record, the marriage must have lasted for a period of at least 10 years. That means that for those couples who are nearing their 10 year anniversary, it may make good financial sense to postpone the divorce until after that date has passed.
Source: investmentnews.com, "New Social Security rules and divorce", Mary Beth Franklin, Nov. 15, 2016