Retirement planning, Social Security and divorce

Unhappy Texas couples who are close to their 10-year mark for their marriages may want to hold off on filing for divorce until after they reach it. Doing so may allow a lower-earning spouse to receive spousal benefits from the Social Security Administration based on the earnings of the higher-earning one.

The Social Security Administration allows a divorced spouse to draw spousal benefits from the time they reach full retirement age until they also retire when they can then draw their own. This allows their individual benefits to continue growing until age 70 while also allowing them to collect spousal benefits while they are still working.

However, the ability to get spousal benefits based on a previous marriage depends on how long the marriage lasted. Benefits are only available to people who were married for at least 10 years or longer. Waiting until reaching the 10-year mark before getting divorced can thus make a significant financial difference when they retire.

In the property division portion of a divorce, marital assets, including the portions of retirement accounts that accrued during the marriage, will be divided by the court unless the couple can come to an agreement otherwise. During negotiations, people should not overlook their future ability to retire. If they will receive a portion of their spouse’s retirement account, they may want to choose to roll the amount over into their own retirement account and then allow it to remain there so they can more easily retire later on. A family law attorney can often be of assistance to a divorcing spouse in negotiating a settlement agreement that takes these and other financial matters into account.