In his list of the Ten Worst ‘Gotchas’ of the Social Security system, Paul Solman informs us that there are 2,728 rules in the Social Security Handbook, buttressed in turn by tens of thousands of additional explanations in something called the Program Operating Manual System. As one might expect from any system that complicated, there are a number of rules that make little sense externally, but nonetheless can dramatically affect how much money you can expect from Social Security when you retire.
Granted, it’s probably of no surprise to anyone that Social Security is a complicated system. But particularly for those intending on claiming spousal benefits, some of these rules can seem almost perverse. One such rule relates to the common tactic among married couples of having one spouse claim full retirement benefits, and the other spousal benefits, until the second spouse reaches age 70 (and begins collecting their own benefits outright). The trick here is that only one spouse can do this, unless of course the two spouses get divorced. Apparently, so long as the couple divorces more than two years before reaching “full retirement age”, both spouses can receive spousal benefits forever, even if they then remarry after age 70. While nobody (at least nobody here) is suggesting that one should add an intentional divorce into your retirement plan, the article does mention the comparative potential of another set of spousal benefits vs. the cost of a quick, no-fault divorce.
This is not the only place where Social Security intervenes in people’s marital affairs. Re-marriage is a fiendishly complicated question when it comes to Social Security spousal benefits. Marrying a new spouse before the age of 60 costs you both your spousal and survivor benefits from your original spouse for the rest of your life. Given how long people are living these days, this is not a minor issue (multiplying even modest monthly Social Security benefits by twenty five years yields a big number). You can claim spousal benefits after only a year of marriage, but need to have been married ten years in order to continue claiming them post-divorce.
For these reasons, and so many others, we cannot stress enough how important it is to proceed with careful deliberation when deciding on your Social Security strategy. There are countless tools to help you optimize Social Security (NewRetirement happens to have one right here), but no calculator, no matter how complicated, can possibly take every particular circumstance into account. Independent research is really the only way to go when dealing with how you’re going to approach Social Security. After all, not only are the ten rules that Mr. Solman cited important, but they should probably make you wonder about the other 2,718…