Gray divorce occurs at a time when people are especially financially vulnerable. They are about to stop working full-time or may have already retired. They have limited prospects for future income and may worry about their financial stability in the future.
During a gray divorce, spouses may need to address retirement savings and pensions as part of the property division process. People often supplement their savings and pensions with Social Security retirement benefits.
What impact does gray divorce have on Social Security eligibility?
Both spouses could still receive benefits
Professionals become eligible for Social Security retirement benefits by making payroll contributions throughout their careers. After they reach retirement age, they can receive a monthly check from the Social Security Administration (SSA) to supplement their other retirement resources.
In scenarios where one spouse earned far more than the other or one spouse left the workforce to support the family at home, there may be concerns about the benefits available to the dependent or lower-earning spouse. Thankfully, the SSA has rules in place to protect dependent spouses.
Provided that the marriage lasted at least 10 years, the lower-earning spouse can receive Social Security retirement benefits based on the employment record of the higher-earning spouse. This policy makes a spouse who is not eligible for retirement benefits on their own able to receive payments from the SSA.
Lower-earning spouses who qualify for minimal benefits can potentially supplement what they receive by making a claim based on their spouse’s earning history. The claims of lower-earning spouses do not impact the benefits received by wage-earning spouses.
Learning more about the rules that apply during a gray divorce can help people plan for the future. Non-working and low-earning spouses may still be able to retire comfortably even after a divorce.