Social Security Claiming: The Case of Two Marriages, Two Divorces

This is the latest in a series of biweekly articles featuring Social Security claiming case studies drawn from the ALM publication “2024 Social Security & Medicare Facts,” by Michael Thomas with support from Jim Blair, a former Social Security administrator, and Marc Kiner, a planning expert with extensive experience in public accounting.

The Scenario: Two 10-Year-Plus Marriages and Two Divorces

Sherry, who does not have enough credits to be eligible for Social Security benefits based on her own work record, was married to Charles and Shaun for over 10 years each, and she has been divorced for over two years from each.

Regardless of the filing status of her ex-spouses, once they and Sherry are at least age 62, Sherry can file for ex-spousal benefits as an independently entitled divorced spouse. She is eligible first on her first husband’s record and later eligible on her second husband’s record.

Due to deemed filing rules, if Sherry takes benefits from Charles’ record before becoming eligible for benefits on Shaun’s record, she must file on Shaun’s record in her first month of eligibility — June 2024, in this scenario.

Based on their ages and life expectancies, Sherry is expected to outlive Charles. Thus, her survivor benefit projections are based on Charles’ work record. Statistically, Sherry is not expected to outlive Shaun, but if she does she would be eligible for a survivor benefit based on his work record.

Sherry was born in May 1962, meaning she has a full retirement age of 67 and an expected death age of 87. Charles was born in November 1960, and he has a full retirement age of 67, at which time he would be eligible for $1,875 in monthly payments. Charles’ expected death age is 84. Shaun was born in May 1967, and he has a full retirement age of 67, at which time he would be entitled to a monthly benefit of $2,250. His expected death age is 85.

What the Numbers Say

While this set of input assumptions seems more complex than many other potential claiming strategies for a single filer, the truth is that there are just two primary claiming strategies for Sherry to consider. The projected difference in lifetime benefit value between them is relatively modest — about $35,000.

The suboptimal strategy would see Sherry file what is known as an “independently entitled divorced spouse application” in May 2029, at which time she would be 67 and therefore entitled to 100% of her spousal benefit ($1,125) based on her marriage to Shaun. She would later become entitled to a $1,875 monthly survivor benefit based on Charles’ worker benefit. This approach would deliver a projected lifetime benefit value of $311,250.

The better strategy is somewhat more complex, but as noted, it delivers about $35,000 in additional projected benefits. In this case, Sherry files in June 2024 at age 62 for an independently entitled divorced spouse application, at which time she will become entitled to a reduced spousal benefit based on Charles’ earnings of $613.