Duration of marriage and divorce affect Social Security benefits

But there is an exception to the two-year divorce rule.

Regular readers of my column know that to qualify for Social Security benefits on an ex-spouse’s earnings record, the marriage has to have lasted at least 10 years, both of the former spouses must be at least 62 years old and the claimant must remain unmarried to collect benefits on an ex.

A few students of Social Security trivia may also know that it is possible to collect Social Security spousal benefits even if the ex-spouse has not yet begun collecting benefits — something that married couples can’t do. However, there is an added hurdle when collecting benefits on an ex-spouse’s work record if he or she has not yet begun collecting Social Security: the divorce must have been finalized for at least two years.

But it takes an eagle-eyed financial adviser, such as Larry McClanahan of Clackamas, Ore., to spot an exception to the two-year rule.

“I’m working with a 65-year-old female client who is in the process of divorcing her 67-year-old husband,” Mr. McClanahan wrote in an e-mail. “They were married more than 10 years and the husband is currently collecting Social Security,” he explained. “My client plans to continue running her business for several years and delay collecting Social Security until age 70, when she can collect the maximum benefit.”

Mr. McClanahan acknowledged that a divorced spouse normally must wait at least two years after the split-up is final to trigger spousal benefits on the other spouse’s earnings record, if he or she has not yet begun collecting benefits.

“However, since the husband is already collecting Social Security, my read of the regulations indicates that once my client reaches her full retirement age of 66, the two-year requirement goes out the window,” he wrote. “At age 66, she will have the option to claim spousal benefits under her ex’s record while delaying her own benefits until age 70.”

Right you are, Larry.

Because her ex-husband is already collecting his Social Security benefits, once she turns 66, she can file a restricted claim for spousal benefits and collect half of her ex-husband’s full-retirement-age benefit. Her own benefit will accrue delayed retirement credits worth 8% per year for every year she postpones collecting beyond her full retirement age up to 70. At that point, she can switch to her own retirement benefit, which will be worth 132% of her age-66 benefit.

As the old saying goes, revenge is a dish best served cold. Four years should allow her plenty of time to savor her Social Security bonus.