One of the most important aspects of a divorce involves the division of marital assets. Establishing a solid financial foundation is essential to planning for the future, and this is even more true for those in Texas who are nearing retirement age when contemplating a military divorce. Having the financial security to move through one’s later years is important, and can give individuals the peace of mind needed to transition into the next phase of life.
Maximizing one’s Social Security benefits is an important part of planning for retirement. Many people think that divorce and Social Security are unrelated, but nothing could be further from the truth. Spouses who are able to plan ahead can reap a significant reward from the timing of both their retirement and divorce. Specifically, understanding how to leverage the spousal benefit can give individuals the chance to delay claiming their own benefits.
A spouse who has been married for at least ten years and divorced for at least two years can claim against the work record of their ex. If they decide to begin claiming at the earliest age, 62, they must claim the higher of the two possible benefit levels. If that happens to be the work record of the former spouse, the claiming party can supplement their finances with the spousal benefit while allowing their own future benefit to grow over time. By the time an individual reaches full retirement age, he or she can enjoy a far higher monthly payment than if they had started claiming early.
These types of financial decisions require careful consideration and an individualized approach. The right course of action will differ for everyone, and the choice of when to begin claiming Social Security depends on a number of factors. However, with the right degree of research and planning, individuals nearing retirement can use the spousal benefit to their advantage following a Texas military divorce.
Source: Fox Business, “5 Ways Divorce Can Impact Your Social Security Benefits“, , May 13, 2014