Anyone who has read my columns about Social Security rules over the past several years undoubtedly knows that a couple must be married at least 10 years before divorcing to claim benefits on an ex-spouse's earnings record.
But one astute financial adviser had an unusual question about whether the 10 years of marriage had to be consecutive. The scenario he outlined is a clear case of he loves me, he loves me not — times two!
"I have a client who is divorced for more than two years and was married to the same person twice," wrote Mike Bruggemann of INPAC Wealth Solutions in Honolulu. "Each time was less than 10 years, but total length of the two marriages was more than 10 years," Mr. Bruggemann explained in an email. "Does that entitle her to claim on her divorced spouse's record?"
Believe it or not, this situation is common enough that the Social Security Administration addresses the issue in its official program manual. Two marriages to the same person with a divorce in between can only be combined to satisfy the 10-year rule if the remarriage took effect in the calendar year following the divorce.
SSA offers the following example:
"Robert, who married Lois on May 6, 1980 was divorced May 2, 1986. On July 7, 1987, they remarried but were again divorced September 5, 1990. The 10-year requirement is met. However, if Robert and Lois had remarried in 1988 instead of 1987 and were divorced again on September 5, 1990, the 10-year requirement would not have been met. The marriage must be in existence in each of the 10 years before the final divorce in order for the claimant to be entitled."
Another adviser, who wants to remain anonymous, posed an interesting question about a couple's best-laid Social Security claiming plans that were interrupted by divorce.
"We have clients, husband is 68 and wife is 63," the adviser wrote. "At 62, the wife filed for her benefits, thus allowing her husband to collect his spousal benefits on her record. The plan was for him to switch to his benefit at age 70. This seemed to maximize their Social Security benefit as a total family."
So far, so good.
"Fast forward 18 months later and the husband has filed for divorce," the adviser explained. "Now the wife wants to rescind her Social Security for two reasons: She is collecting reduced benefits and she wants to stop her husband from collecting spousal benefits on her record."
"Is this possible?" the adviser asked. "And even if she could do that, would that stop her husband from collecting on spousal benefits?"
No. The wife can only withdraw her application for benefits (and repay them) within 12 months of first claiming. So, she has missed the initial 12-month window. She would have to wait until she reaches her full retirement age of 66 to suspend her benefits. That would allow her own benefits to increase by 8% per year up to age 70, but it won't affect her ex-husband's benefits.
Under the new rules authorized by the Bipartisan Budget Act of 2015, anyone can still suspend benefits at their full retirement age or later but in most cases, no one can collect benefits on the worker's earnings record during the suspension and the worker cannot collect on anyone else's record. However, that new rule only applies to couples who are currently married.
There is an exception for divorced spouses specifically designed to prevent one spouse from suspending benefits in order the punish an ex-spouse. If a divorced spouse is collecting benefits on an ex's earnings record and that ex suspends his or her benefits, spousal benefits would continue for the other ex-spouse.
Given the ex-spouses' five-year age difference, it wouldn't matter anyway. By the time she turns 66, her ex would already be 71 and would no longer need to collect spousal benefits. He would have switched to his larger retirement benefits at 70 when delayed retirement credits end.
But there's one glimmer of hope for this ex-wife. If her ex-husband dies first, she would be entitled to survivor benefits worth 100% of what he was collecting at time of death, including any delayed retirement credits. Even though she collected her reduced retirement benefits early, it would have no impact on her survivor benefits if she were at least full retirement age at the time.
Here are a few other unusual rules regarding Social Security benefits for divorced spouses.
If a couple was married at least 10 years and divorced for at least two years, an ex-spouse is "independently entitled" to benefits on the former spouse's earnings record even if the former spouse has not yet claimed benefits. However, to file a restricted claim for spousal benefits only, one must be born before January 2, 1954.
If each ex-spouse waits until full retirement age or later to claim Social Security, each can file a restricted claim for spousal benefits on the other's earnings record — assuming they were each born before 1954. That differs from currently married couples where only one spouse can claim spousal benefits on the other's earnings record.
(Questions about new Social Security rules? Find the answers in my new ebook.)
Mary Beth Franklin is a certified financial planner.