Many divorces don’t end well and the last thing a divorcee may want to do is help their ex-spouse, who they can’t stand, receive a bigger Social Security benefit. But in some cases, that is exactly what you should do, especially if your ex-spouse has the bigger benefit.
If your ex-spouse has the bigger Social Security benefit and dies before you do, you could receive their full benefit amount in the form of a Survivor Benefit.
If you have the opportunity, you should encourage him or her to delay claiming as long as possible, in order to make the benefit amount as large as possible. You could even make it easier for your ex-spouse to claim a bigger benefit by making them aware of an incredible claiming strategy that is available to qualified divorced spouses. This strategy is called Restricted Application.
In order to qualify to use the Restricted Application claiming strategy, the basic qualifications are:
1) You or your ex-spouse must have been born prior to January 2, 1954
2) You must have been married for at least 10 years and you can not be re-married
3) You must not have already claimed Social Security benefit
If your ex-spouse’s benefit is bigger than yours, you should encourage him/her to delay claiming it as long as possible. If they meet the qualifications above for the Restricted Application claiming strategy, you should make them aware of it because it could make it much easier for them to claim the maximum Social Security benefit.
The key to using the Restricted Application claiming strategy is the strategic claiming of the Spousal Benefit. You should ensure that your ex-spouse knows how he or she can use the Spousal Benefit to maximize the size of their Social Security check. Maximizing the size of his or her benefit also maximizes the size of the Survivor Benefit, which you could end up receiving if you live longer than your ex-spouse.
Consider the case of Pat (the ex-wife) and Cory (the ex-husband). Pat’s Full Retirement Age benefit is $1,250 and Cory’s is $2,000. If Cory does not know that he can claim a Spousal Benefit, then he will, more than likely, claim his regular Work History Benefit at age 66 to receive $2,000 per month.
Pat tells Cory that he can claim a Spousal Benefit at his Full Retirement Age of 66 and receive half (50%) of her benefit ($625 per month). Refer to Table 1 below which shows how the strategy works. If Cory claims a Spousal Benefit, it has no impact on Pat’s benefit. In fact, the size of her Social Security benefit does not change at all.
Cory claims a Spousal Benefit at age 66, which pays him $625 per month and $7,500 per year over the next four years. Meanwhile, his still unclaimed Work History Benefit earns Delayed Retirement Credits and grows by 8% per year.
At age 70, Cory switches from the Spousal Benefit to his maxed-out Work History Benefit of $2,640 per month, which he receives for the rest of his life. If Pat lives longer than Cory, eventually she will receive his higher monthly Social Security check of $2,640, in the form of a Survivor Benefit.
Table 2 below shows what happens if we assume that Cory lives until age 83 and Pat lives until age 88. Making use of the Spousal Benefit, Cory benefits by receiving a check every month of $625 ($7,500 a year), starting at age 66. Because he received this income from Social Security, it also made it easier for him to delay claiming his own benefit until age 70.
At age 70, Cory switched to his maxed-out benefit and receives $2,640 per month ($31,680 annually), until the day he dies at age 83. At that time, Pat then benefits from educating her ex-husband about the Spousal Benefit because she now receives Cory’s higher monthly benefit of $2,640, in the form of a Survivor Benefit. She received the higher Survivor Benefit until her death at age 88. In this case, both ex-spouses benefited.
(Pat could remarry at age 60 or older and still be entitled to claim a Survivor Benefit after Cory dies. If Pat were to remarry before age 60, she would lose the right to claim a Survivor Benefit after Cory’s death.)
Even if you hate your ex-spouse, it still makes sense to consider this strategy if you or your spouse qualify. To see how this strategy would specifically work in your situation, you can use my Paid to Wait Social Security Calculator. Just enter in your name, birthdate and full retirement age Social Security benefit, and that same information for your spouse, and it will instantly show you your custom strategy with step-by-step instructions on how to do it.