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New Social Security rules will impact many divorced couples

With more people divorcing in the latter half of their lives, the ability to qualify for Social Security spousal benefits is often a primary concern when determining just how the divorce will impact your financial future and your retirement. Even if you divorce long before your senior years, you may qualify for spousal benefits based on the money your ex paid into the system once you reach 62. You would have to meet certain Social Security Administration requirements, such as having been married for 10 years and not currently being remarried.

What many people may not realize is that Congress made some significant changes to Social Security regulations late last year that will reduce benefits for divorced as well as still-married couples. However, divorced couples will feel the changes more since they're no longer living together. The changes were part of the Bipartisan Budget Act of 2015, which avoided a government shutdown. They will take effect in May.

Under the current SSA rules, if an ex-spouse meets the requirements, he or she can collect spousal benefits based on an ex-spouse's Social Security record while deferring their own benefits until they are 70. This will allow them to collect more on the money they've paid into the system later.

However, under the new regulations, they will no longer be allowed to get that restricted spousal benefits unless they turned 62 at some point during 2015. The change was ostensibly made by Congress to close a loophole in the system (and a widely-used one) and to save money. The change will likely impact women more than men since, on average, they live longer. Therefore, their Social Security and other retirement benefits have to last them longer.

If you have questions or concerns about the Social Security spousal benefits to which you may be entitled, your Louisiana family law attorney should be able to answer your questions and provide advice. He or she can also refer you to a financial advisor who can help you as you plan for retirement.

Source: KSL.com, "Social Security change reduces benefits for couples, divorced individuals," Flint Stephens, Jan. 27, 2016

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