Social Security, Women, And Divorce

Social Security, Women, And Divorce

Key facts you should know

On average, women enter their retirement years poorer than men. This is particularly true for divorcing women. The following statistics, provided by the Social Security Administration (June, 2006), bear evidence to this claim:

• In 2004, the average annual Social Security income received by women 65+ was 76% of that received by men.

• Nationwide, Social Security comprises 53% of the income of elderly unmarried women, but only 38% of income for elderly unmarried men.

Part of the reason for this disparity is that women earn less than men on average. Another factor is that if a person (most often a woman) takes time off from the workforce to take care of his/her children or the elderly, the caregiver's Social Security retirement benefits decline. If a person has a few years of no earnings or low earnings, the benefit amount would typically be lower than if that person had worked steadily.

When the Social Security program was designed in the 1930s, it was based on the "traditional" family model in which women stayed at home and focused on homemaking and child-rearing. When a woman's husband retired, he received his Social Security check and she received half the value of his check until he died. Then she received 100 percent. (I'm not sure what the message is here: That homemaking and child-rearing is half as valuable as participating in the workforce? Or that dependent spouses should stay financially dependent)?

In any event, the 50% number rears its head again in the Social Security program's policy toward divorce. Here are some rules:

1. If you divorce after at least 10 years of marriage and don't remarry, you can collect retirement benefits on your former spouse's Social Security record if you are at least age 62 and if your former spouse is entitled to or receiving benefits. This is true whether your ex remarries or not.

2. Full retirement age for Social Security is 65 for those born in 1937 or before and 67 for those born in 1960 or after. For those born in between these years, there is a sliding scale. You can still begin accessing Social Security retirement benefits at age 62, but you will lock in a payment stream that is approximately 30 percent lower than if you wait until your full retirement age.

3. The amount you are entitled to receive is 50% of your ex's Social Security benefit or your own benefit based on your own employment history, whichever is greater.

4. If you remarry, you generally cannot collect benefits on your ex's record unless your later marriage ends (whether by death, divorce, or annulment).

5. If your divorced spouse dies, you can receive 100% of his benefits as a widow/widower if the marriage lasted 10 years or more.

6. Depending on your income bracket, 85% of Social Security benefits can be taxable.

7. One benefit to Social Security is that even if you collect benefits from your ex's record, this doesn't impact his benefit in any way, so it's not a negotiation point in divorce. In fact, he doesn't even have to know when you start receiving benefits.

For more information, check out the Social Security Administration's website at www.ssa.gov.

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