A little known Social Security hack for divorcees looking to remarry

Social Security rules are complicated and change often. For the most recent “Ask Larry” columns, check out maximizemysocialsecurity.com/ask-larry.

File this under you learn something new every day. Credit goes to Jim Blankenship, a financial planner who has a very informative financial blog. Jim somehow discovered deep in the bowels of the Social Security Program Operating Manual System (POMS) that you can get remarried and continue to collect a divorcee spousal benefit, provided you marry someone who is also collecting benefits based on the work record of his or her deceased spouse or of a living or dead ex-spouse (to whom one was married for a decade or more).

Here’s the provision. If you can benefit from this provision, take it with you to the Social Security office, because they surely will say you’re nuts.

RS 00202.045 Remarriage of a Divorced Spouse – Policy: The marriage of a divorced spouse will terminate entitlement to such benefits unless the marriage is to an individual entitled to widow(er)’s, mother’s, father’s, CDB, divorced spouse’s, or parents benefits.

Gay women, listen up. This may be of particular importance to you!

Women still earn less than men on average in the U.S. Considering that fact, changing attitudes towards homosexuality and the legalization of same-sex marriage, there may be millions of older gay female couples who were previously married to men and who are holding off getting married from fear that they will lose their divorcee benefits. But if both partners are in this boat, this provision means that they can get married and not lose anything. Furthermore, if they haven’t yet filed for their own retirement benefits, they can wait to do that until age 70 when their retirement benefit starts at its highest value. At that point, they will collect what they were collecting from their ex or their own retirement benefit — whichever is larger.

When your ex dies, you may get a larger Social Security check

Prior to learning about this provision, I thought that marriage eliminated the ability to collect divorcee spousal benefits. But if you marry someone else who is collecting off of a dead spouse or a living or dead ex-spouse, you can get around these rules. Moreover, if you hitch up in this manner and are taking divorcee spousal benefits, you not only get to keep them, you also get to graduate to even higher divorcee widow(er) benefits when your ex passes away.

How married couples can use this rule

If you are married, only you or your spouse can collect full spousal benefits starting at full retirement age and then let their own retirement benefit grow until 70. But if you get divorced after 10 years of marriage, both of you can — starting at your full retirement ages — collect full divorcee spousal benefits on your exs’ work records. I’ve been suggesting, half in jest, that married couples consider getting divorced before reaching full retirement age so they can both collect full divorcee spousal benefits. But this provision suggests that they could get divorced (at least two years before the oldest of you reaches full retirement age), start collecting their full divorcee spousal benefits, and then get remarried immediately and continue to collect full spousal benefits off of each other’s work record.

Anonymous: I applied for and am now receiving my retirement benefits at age 62. I was married to my second husband at the time. We then separated, and I am now divorced. I spoke to a Social Security representative, Bernice, prior to receiving my first check at which time she told me what my benefit amount would be. During our chat, I had told her that I was married previously, but my first husband was killed in car accident at age 30, and we had no children. She researched and indicated that if one was divorced from her second husband, one could collect on the first husband, and my benefit would increase by approximately $400 per month. I was not divorced from my second husband then, but I am now as of December of 2014. I spoke with another Social Security representative, Troy, back in December 2014 and was told that my first husband did not make enough before he died and that the other Social Security representative gave me the wrong information! What should I do?

Larry Kotlikoff: Very sorry that you have had this terrible run around with Social Security. I hope you didn’t get divorced on their advice that it would help you financially, only to find out that the original person you spoke with was wrong. But it may be that the second person you spoke with was wrong too. What I tell everyone is not to ask Social Security what they will give you, but to do your own homework and then tell them what they owe you. There is now extremely precise and inexpensive commercial Social Security software, which can be used to calculate what your widow’s benefit is based on your first husband’s work record.

Social Security is under no obligation to provide you information about your first husband’s work record. They are, however, obligated to provide you with his so-called Primary Insurance Amount. Assuming they have this Primary Insurance Amount correct, which is an important question in itself, the first Social Security representative may have told you about your full divorcee widow’s benefit, not the excess divorcee widow’s benefit. Once you start taking your own retirement benefit, Social Security will only give you a widow’s benefit equal to the amount by which your widow’s benefit exceeds your own retirement benefit. If this excess widow’s benefit is negative — that is, if your widow’s benefit is less than your retirement benefit — your excess widow’s benefit will be set to zero. The bottom line is that the first Social Security representative may have told you something that was literally true about a benefit — your full widow’s benefit — which you aren’t able to collect. She should have told you about your excess widow’s benefit. If, by chance, you are still within one year of having started taking your retirement benefit, you can withdraw it (but you’ll need to pay back every penny of benefits you received in order to do so). In this case, you can collect just your widow’s benefit and wait until 70 to collect your own retirement benefit (when it will start at a 76 percent higher value, and that’s over and above the system’s adjustment for inflation).

Best of luck.

Anonymous – Ind.: I live in the state of Indiana and get $1,254 in Social Security Disability. I’m now considering working part-time (20 hours each week). How much am I allowed to make in income each month without decreasing my same Social Security benefits?

Larry Kotlikoff: ​The quick answer is that you have just nine trial months over a five year period in which you can earn more than $780 per month before losing any benefits. After you have exceeded the nine trial months, you have 36 months during which you can earn up to $1,090 and not lose any benefits. (These $780 and $1,090 are adjusted annually.) Even after the 36 months are up, your benefits do not end as long as don’t earn more than $1,090 per month. Social Security gives you a break for some work-related expenses. They also let you stay on Medicare for free for 93 months, after which you can pay to remain on Medicare. This Social Security website is reasonably clear about these provisions.

Cindy – Mukwonago, Wis.: I just became a widow in March of 2015. My husband was 52. He was killed in an industrial accident at his place of employment. I am 57. What is the earliest age I can collect Social Security?

Larry Kotlikoff: I’m terribly sorry to hear about your husband’s death. If you are disabled, you can collect reduced widow’s benefits right now, but this reduction will go away when you reach full retirement age if you are also entitled to Social Security disability benefits on your own account when your widow’s benefits start. Otherwise, you can begin taking a reduced widow’s benefit starting at 60. At 70, you can then start collecting your own retirement benefit. If it’s larger than your reduced widow’s benefit, you’ll get the larger amount as your total check. If it’s not, the optimal strategy in your case is to wait until early retirement age (62) and take just your own retirement benefit. At full retirement age, you’d take your unreduced widow’s benefit. There is actually a different full retirement age for widows and for retirement benefits, which could matter a bit in your case. Careful software that includes this difference can help you understand which strategy is best. It can also factor in the earnings test in case you are still working.

Brett – Lugoff, S.C.: There is a 10 year age difference between my wife and me (she is older). She is now 69 and took Social Security when she hit full retirement age. My income was higher, so I would expect my Social Security benefits to be roughly 50 percent higher than hers at full retirement age. What is the best strategy to maximize our benefits? Can I file for spousal benefits at full retirement age and wait to take mine at 70?

Larry Kotlikoff: ​Your best strategy at this point is to file just for your spousal benefits at FRA (full retirement age) and then take your own retirement benefit at 70. Let your wife know that if you pass away before she does, she’ll be able to collect a higher check in the form of a widow’s benefit based on your work record.

Philip – Elkhorn, Wis.: My husband is 68, and I’m 67. After reading your book, “Get What’s Yours,” (excellent!) my husband filed for Social Security and suspended. I then applied for spousal benefits. I was found entitled, and I will get my first spousal check the middle of May, plus I’ve already received a lump sum (back) payment of over $8,000. In addition, I received a booklet regarding Social Security Disability Benefits, and I get e-mails from the USDA regarding nutrition info. Are spousal benefits considered disability payments, or has there been some mistake? I applied in a Social Security office and made it clear that I was applying for spousal benefits, not disability benefits. Do I have a problem?

Larry Kotlikoff: You might check with them, but disability benefits aren’t granted to anyone beyond full retirement age. So they must have sent you the booklet by mistake. Glad the book helped!

Lynette – Astoria, Ill.: I have been receiving my deceased husband’s disability Social Security check (partial amount). My question is this: He was a vet and was in served during Vietnam. I have been told that there are benefits available to me. If I find out where I can learn more about this and receive this, will it affect my Social Security check? I only get $1058 a month and can’t afford to lose any of that. Thank you for your help.

Larry Kotlikoff: I am very sorry for your loss, and I know everyone says this, but it’s also very true — I am very grateful for your husband’s service to our country.

You can receive the larger amount or your ​own retirement benefit and your husband’s check. Both amounts are adjusted through time for inflation. You should check with Social Security whether your check will be larger if you start collecting your own retirement benefit. It may not be larger now, but could be if you start taking it at age 70. At 70, your retirement benefit is 76 percent larger, after inflation, than it is at age 62.

If you are eligible for VA benefits, those would not affect your Social Security check.