Retirement is one of the things married couples often plan together and look forward to. But as some couples in New Jersey discover, it is also one of the tougher things to address when the marriage does not work out. Divorce can affect how much you receive from Social Security, but it might not be as scary as you think.
How divorce changes finances
Just like divorce causes major changes in your relationships, your environment and your emotions, it impacts your finances. Once you decide that ending the marriage is the next step, you will need to negotiate the division of property and figure out spousal and child support. Some of the things some couples overlook when going through this are retirement accounts and Social Security benefits. But these can also be part of the negotiations since retirement accounts can be divided during divorce and Social Security benefits should definitely be taken into account.
Social Security benefits can be affected post-divorce
If you were the spouse that did not work during marriage because you stayed home to take care of the family or earned significantly less as you worked, you might have been counting on your ex-spouse’s work record to provide you with benefits. Divorce could throw a wrench in those plans if you did not meet the criteria required for people to claim benefits on an ex-spouse’s work record. These include:
- A marriage that lasted 10 years or more
- Reaching age 62
- Becoming eligible for your own social security benefits or being eligible for disability benefits
- Not remarrying after the divorce
If you have your own work record, you will be able to choose between claiming full benefits from that record or claiming benefits worth 50% of your ex-spouse’s benefits. Review your situation to figure out under which option you will receive a higher amount to decide which to choose.