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How does divorce affect Social Security benefits?

In our previous post, we wrote about how divorce can raise many different types of financial issues. This week, let's focus on a specific aspect of this, namely the impact of divorce on Social Security benefits. With the divorce rate as high as it is for people over 50, this is clearly an issue that affects a lot of people, including many baby boomers.

Many baby boomers are approaching the question of how to maximize their Social Security benefits very systematically. This is pretty much what one would expect from a generation that has not hesitated to make demands.

One of the basic strategies for optimizing Social Security is to delay the date when you start to collect it. Married couples can often capitalize on this by a form of tag-teaming in which one spouse claims spousal benefits to delay the date when he or she collects his or her own benefits until it is at the maximum.

Once that date is reached, the couple can switch. The spouse who had starting collecting earlier switches to collecting spousal benefits.

Of course, this only works if a couple stays together. What happens to your Social Security strategy if you get divorced before you can effectively tag-team?

It's important to be aware that if you were married for at least ten years, you can still engage in an element of tag-teaming. This means being allowed to claim your former partner's benefits for a period of time before you switch to your own benefits.

To be sure, optimizing Social Security may be only one of many factors in a complicated and emotional divorce case. There may be many other issues to resolve, including many others involved property division. But don't overlook the potential importance of optimizing Social Security, because that income may be very important in your retirement years.

Source: "New services help boomers max out Social Security," Reuters, Linda Stern, 10-31-12

Our firm handles situations similar to this post. To learn more about our practice, please visit our Rockford divorce page.

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