Divorce Rich with Jacki Roessler, CDFA
Welcome to the Divorce Rich Podcast! Join your host, highly sought-after speaker and experienced Certified Divorce Financial Analyst, Jacki Roessler, CDFA in this engaging and down to earth show. Along with her guests, Jacki offers clear and detailed advice to improve your financial decisions before, during and after divorce so you can survive divorce rich! New episodes are posted every other Thursday! You can reach Jacki through her Michigan-based firm, Roessler Divorce Consulting, located at 600 S. Adams, Suite 300, Birmingham, MI 48009 or by email at jacqueline@roesslerdivorce.com.
Divorce Rich with Jacki Roessler, CDFA
Maximizing Divorce Benefits with an Expert from Social Security
Discover how to navigate the maze of Social Security benefits and divorce with insights from Vonda Van Til, former Public Affairs Specialist for the Social Security Administration in Michigan. Learn the essential requirements for a former spouse to collect benefits, such as the marriage needing to last at least 10 years and both parties being at least 62 years old. Understand how you can file for benefits based on the highest amount from any qualifying former spouse, even if you've had multiple marriages. Vonda also explains key exceptions and provides tips for financial planning post-divorce, making this a must-listen for anyone facing this challenging life transition.
Jacki and Vonda explore strategies for maximizing your financial position and clear up common misconceptions. Don't miss this episode of Divorce Rich Podcast, packed with valuable information to help secure your financial future
RESOURCES
- CLICK THE LINK BELOW to create your own Social Security account online
Visit us at https://www.roesslerdivorce.com/ to learn more about Jacki's practice and to find valuable resources for your case.
Welcome to the Divorce Rich Podcast. I'm your host, jackie Ressler. I've been a certified divorce financial analyst for 28 years, helping clients and their attorneys navigate the often complex and confusing financial issues in divorce. If you're in the process of, or considering, divorce, now is the time for you to take a deep breath and give yourself permission to find clarity on the financial issues you're facing. Rich means many things. To many people, I believe the best definition of being rich is someone who has access to many resources. Along with my guests on this podcast, I will be bringing you a wide variety of information so that you can make sound and informed financial decisions for your financial future. Hi and welcome back to the Divorce Rich Podcast. Today I'm excited because I am posting my very last legacy episode from my old podcast and sharing it here on the Divorce Rich Podcast today.
Speaker 1:This is one that I've been saving. It is one that I think has a lot of meat on its bones. It's a topic that comes up in so many conversations that I have with clients, and even clients who've been divorced for a very long time. This topic is all about social security and divorce and all of the complex and confusing divorce rules related to Social Security. So I went to the source for this interview and I was able to interview Vonda Van Til, who was the public affairs specialist for the state of Michigan for the Social Security Administration, and she has a great way of breaking down again these really confusing rules into easy to understand information that anybody can use to start collecting their post-divorce benefits. So I hope you enjoyed this episode. Well, divorce and Social Security is complicated and many clients are confused. Many financial advisors are confused about what people are entitled to and when. So let's start with the basics. What are the requirements for a former spouse to collect Social Security retirement benefits on their former spouse?
Speaker 2:Sure. So we have retirement benefits, which are for an individual that has worked and paid into the system, and they become what's called insured after working and paying in. So that's retirement on your own Social Security number. And then we also have spouses and divorced spouses benefits payable on that worker's record. So let me just explain the spousal, divorce spousal, before we get into the technical requirements.
Speaker 2:Your own full benefit, your own full retirement benefit, has to be less than half of your spouse's or your ex-spouse's. See, you have to file on your own record if you have 40 credits before Social Security will look into spouses and divorced spouses benefits second. So if you have 40 credits, you are required to file for your own retirement benefit first, and then your own full amount has to be less than half of your spouse or ex-spouse's full amount in order for you to qualify on their record. So again, your own has to be less than half.
Speaker 2:The spousal and the divorce spousal benefit is for the individual that you know, stayed home, took care of the kids, didn't work a whole lot outside the home. Maybe they don't even have 40 credits. That's the intention of the benefit. To qualify for divorce spousal benefits you do have to be married for at least 10 years prior to that divorce taking place. So you have to be 62 or older, just like the retirees have to be 62 or older. You have to have that 10-year duration of marriage requirement and you can't be remarried to someone else and still file on your ex-spouse's record.
Speaker 1:Okay, and my understanding was that you could let's say that you had three marriages that were each 10 years, that you could see which one was the highest and you could use each of those former spouses to submit to Social Security. Is that?
Speaker 2:right, yeah, so if I had three previous marriages that lasted over 10 years, I have over 10 years each. I have three options now and you can file the higher of the three. If they're all living, you're just going to file on the one that has the highest benefit. If one of them is deceased, which we haven't talked about yet, you're going to file on the record of the deceased person, because it's typically almost always higher. So you can't collect off all three, but you can file on the higher of the three.
Speaker 1:I know that there is an exception as well, that if the former spouse isn't currently collecting, there are some limits on how long you have to wait. Can you explain that?
Speaker 2:So for spousal benefits, if you're married, you can't get anything on your spouse's record until your spouse is also collecting. If you're divorced, it's the same thing. You can't get anything on your ex-spouse's record until they're collecting, with the exception if your divorce took place at least two years ago. So if you've been divorced for at least two years, your ex does have to be 62 or older, but does not have to be collecting in order for you to be able to collect on their record. And how old do you have to be? 62.
Speaker 1:Okay. So I think that has come up in quite a few of my cases because people the higher wage earner often wants to wait to delay their benefit until they get a higher benefit, whereas the lower wage earner needs to access that money as soon as possible, and so that's sort of an unpleasant surprise that they have to wait two years.
Speaker 2:So that's important to know it is, it is. And it's also important to know oh my gosh, I don't have to wait for my ex to file before I can file. You know they divorced quite a while ago. It's like no, you don't you know. Are you thinking about collecting? You just have to know enough to Exactly, vonda.
Speaker 1:You hit the nail on the head. That's the problem. The problem is that people aren't aware that they are eligible to apply, so I always tell clients when the divorce is done. That's one of those things that you need to keep track of in your future calendar. So when your former spouse hits age 62, as long as you're 62 and it's been two years since you've been divorced you can file for your spousal retirement benefit on your former spouse's record. But no one's going to come knocking on your door reminding you. Hey, this is a good time for you to check and see are you eligible for this payment.
Speaker 2:Yeah, absolutely. Even all the funeral homes in Michigan notify us of all deaths. And then we know we have to look for potential beneficiaries. We know about a current spouse, but not ex spouses. Wow.
Speaker 1:I did not know that. We don't know about the ex-spouses, that they contact you.
Speaker 2:That's actually great, but yeah it alleviates overpayments happening on the record because we want to terminate the benefits as soon as possible. But that's been brought up several times is how do I know if my ex passed away, right, and I'm like, well, we don't contact you, unfortunately, right, we don't know about you.
Speaker 1:So that's another important point Again, to make sure that they keep track of letting you know and not wait for the call. Yeah, exactly, is there a limit to how many former spouses can collect on one person's benefit?
Speaker 2:No, there's not. No, there's not. And the thing is, you know, let's say someone has three ex-spouses and all three are collecting on their record. None of them are affecting each other, nor are they affecting the actual their record. None of them are affecting each other, nor are they affecting the actual worker.
Speaker 1:Nobody's reducing anyone else's benefits, right, that's good to know. I think that there is a concern on the higher wage earner that their benefit is going to come out of their pocket, but actually it comes out of Social Security's pocket.
Speaker 2:Well, and oftentimes they're also concerned if they're currently remarried to someone else. They think that their current spouse is going to be affected because the ex-spouse is coming on board. Okay, and it doesn't. It doesn't affect them at all.
Speaker 1:Okay, and what about remarriage?
Speaker 2:And you get remarried, it's going to terminate your divorced spouse's benefits. Okay, if the ex-spouse is deceased, you can remarry after the age of 60 and continue to collect a surviving divorced widow or widower's benefit.
Speaker 1:So that's a perfect segue into the next topic that I wanted to ask you about, which is how does it work for survivor benefits? I don't think people always realize that survivor benefits are a different entity almost than the retiree or the divorced spouse retirement benefits.
Speaker 2:Oh, you're absolutely right. They get it confused with the spouse divorce spousal benefit that we just talked about. Survivor benefits are completely different. So, spouse, divorced spouse, those benefits are when your spouse or ex-spouse is living, and the most you can get is half of their benefits. The surviving divorced widow and widower's benefit is when your ex is deceased, and then the most you can get on their record is 100%. So the base is 50% when they're alive, 100% when they're deceased. Everything else is the same. You had to have been married to them for at least 10 years prior to the divorce. You can't be remarried unless the remarriage occurred after age 60. And you're only going to file on their record if you can get more money. You know, if your own retirement is more than what you can get on their deceased record, you wouldn't file on their record, obviously. And oh, you have to be 60 or older. So for spouse, divorced spouse, you have to be 62 or older, and then for the survivors it's 60 and older.
Speaker 1:This is a lot to remember, especially for someone who's just got divorced. To keep all of that, track.
Speaker 2:I know it is. So just remember when the ex is alive, it's half. When they're deceased, it's a hundred.
Speaker 1:When the worker is deceased, you can get up to a hundred percent of their benefit. I don't think very many people realize that either, but that can be a very big difference in someone who's on a fixed income.
Speaker 2:Of course. Oh yeah, survivor benefits are almost always higher than a spouse divorce spousal benefit for sure.
Speaker 1:Right and again, the same rules apply with how many spouses can collect.
Speaker 2:Yep, yep, it doesn't matter how many. If they qualify, they qualify.
Speaker 1:And it's the same qualification, right, the same tenure Yep.
Speaker 2:So if you're the worker your ex is deceased, you can file on their record as early as age 60, and you can also remarry after age 60, and you can continue to collect that surviving divorce benefit on the deceased worker's record.
Speaker 1:Okay, that's good to know too. And again, can you imagine if that was the case for you? You got married right before you turned 60. Oh yeah, what is the reason for that?
Speaker 2:Well, so survivors can remarry after age 60 and collect on their deceased spouse. So they just made the same rules for the ex-spouse. I see Okay.
Speaker 1:And where did that age come from? Oh, I have no idea.
Speaker 2:I don't know where.
Speaker 1:Half of this stuff comes from. Well, that makes me feel better that I don't, that I don't know, and it is how often did these kinds of rules change? Have they ever changed these particular rules? I?
Speaker 2:mean, I've been with the agency for 31 years and it's always been the same. So 31 years and it's always been the same. So you know minor changes, the increase in the full retirement age. That happened in 1983, but it didn't affect anyone until the year 2000. So you know, obviously that's in my timeframe working at Social Security and that just gradually went from age 65 to age 67.
Speaker 2:Now one thing that's really interesting about the full retirement age is it's different for survivor full retirement age than it is for retirement full retirement age and that you talk about confusing. That gets very confusing and a lot of people are not aware of that difference. The reason it's important to know is because a lot of people are eligible for two benefits from Social Security when they retire, if you will. They're eligible for Social Security retirement because they've worked and paid in enough, but they're also eligible for survivor benefits because their spouse passed away or their ex-spouse passed away. So when they retire from their job they're like now what do I do? I can get retirement from Social Security or I can get surviving divorced widows benefits from Social Security.
Speaker 2:What one do I do? And what they can do is file for one and switch to the other later. It's a strategy that they can take advantage of. So you know, let's say they're 62 and they finally retire, they could file for reduced retirement benefits at 62 and switched over to an unreduced survivor benefit at their survivor full retirement age, and that's why it's important to know what their survivor full retirement age is, and it's not always the same as their retirement full retirement age. You can file for one and switch to the other later.
Speaker 1:Wow, that is amazing information to know. Now, when somebody goes, let's say that they're ready to start putting an application and then they don't know what's the best way to go, do you recommend that people come into the office locally or that they do it online?
Speaker 2:Well, if they're unsure of what to do, like the retirement of the survivors, they should call and make an appointment. Okay, and you know a phone appointment is fine we don't do very many in-persons, and you know a phone appointment is fine, we don't do very many in-persons but I would recommend making an appointment and they're totally change their mind and say oh, I don't want to do retirement now, Now I want to do survivor benefits, because you just told me the numbers.
Speaker 1:Right, okay and so, but they would be counseled on that if they call and talk to someone there. So they don't have to figure it out themselves. Okay, one last question that I'm going to ask you. So when we were talking earlier, you mentioned that people are confused about who regulates Social Security and whether or not they can waive their Social Security benefits legally in the divorce decree.
Speaker 2:Right. Yes, we do see that quite often where somebody will say to me you know, unfortunately I can't get you know survivor benefits on my ex or spousal benefits on my ex because it's in the divorce that I'm not permitted to file for that. And it's just important for people to know that Social Security is a federal program and so whatever is written in the divorce decree cannot override federal law. So always, you know, call Social Security, find out what you could be eligible for and they'll guide you through that process. I recommend that individuals you know go to our website, which is a really good federal website. It's ssagov. We have, you know, under spouses, we have a divorce spousal link and under survivors, we have a divorced link. So lots of details there on the available benefits for individuals. And I would just recommend to everybody to create a my Social Security account at ssagov as well, because that's your end to conducting business with Social Security in the future.
Speaker 1:So thank you so much for being here. I learned some things that I was not aware of. Again, if I want to repeat that website, that ssagov G-O-V if people have questions, I've been there. It is very user-friendly. It's one of the more user-friendly of the government websites that I've seen, as compared to, let's say, the IRS website, which is not. We shall not speak of other agencies.
Speaker 2:Vonda. Thank you again. Thank you so much for the opportunity.
Speaker 1:Thank you so much for taking time out of your day to listen to Divorce Rich Podcast. If you like this podcast, please follow us on Apple or anywhere that you download podcasts and share this link with any friends or family that you think might benefit from this information.
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