Atlanta, Georgia – A recent question posed to retirement expert Rusty concerns a working divorcee who just turned 65 and is wondering if she can start collecting Social Security while working full time. The individual, who was divorced after a 38-year marriage, is also curious about potentially collecting her ex-husband’s higher benefit amount. The complexities of Social Security benefits for divorced individuals can be confusing, but Rusty provides clarity on navigating the system.
One important consideration for the working divorcee is the earnings test, which limits how much one can earn before Social Security begins reducing benefits. If the individual exceeds the annual earnings limit, they may face reductions in benefits and potential ineligibility until reaching full retirement age. Waiting to claim Social Security can result in a higher monthly payment and avoid the earnings test once the individual reaches full retirement age.
In terms of collecting benefits from an ex-spouse, it’s not possible to replace one’s own benefit with the ex-husband’s higher amount. However, there is an opportunity to receive an additional amount to bring the monthly payment up to 50% of the ex-spouse’s benefit. This additional benefit, known as a spousal boost, is calculated based on the difference between half of the ex-spouse’s entitlement and the individual’s own entitlement at full retirement age.
Deciding when to claim Social Security benefits involves weighing the impact of current earnings, the potential for reduced benefits with early claiming, and the eligibility requirements for spousal boosts. Understanding the nuances of Social Security benefits for divorced individuals is crucial for maximizing one’s retirement income. By carefully considering one’s options and timing, individuals can make informed decisions that align with their financial goals and retirement plans.