TRANSCRIPT

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#63 - Social Security Planning After Divorce: Crucial Rules and Mistakes to Avoid

Eric Blake: Divorce is hard enough, but missing out on thousands of Social security benefits because you didn't know your options. That is something we wanna help you avoid.

Eric Blake: Welcome to another episode of the Simply Retirement Podcast, where we want to empower and educate women to live your retirement. On your terms. I'm your host, Eric Blake. In last week's episode, we talked with collaborative divorce attorney Jill Lowe, and we talked about the importance of understanding your financial resources before, during, and after divorce, especially if you're in or near to retirement.

Meeting with a financial planner who specializes in retirement income can be critical, especially when you're evaluating settlement options that may affect your future income sources. Just to be clear, social security benefits themselves cannot be negotiated. They're not gonna be part of a divorce decree, but knowing what you're eligible for and just as importantly, what could change if you're not careful, can be critical when you're negotiating everything else from assets splits to retirement income.

Now, regardless of what you may hear about the future of the program, social security still plays a foundational role in retirement income because it is still for many women, specifically the single source of lifetime guaranteed income that will increase every single year. And the decisions you make, especially as it relates to divorce, about when and how to claim can have lasting consequences.

Today we're diving into what divorced women need to know about Social Security, not just eligibility, but we're gonna talk about timing, strategy, and avoiding irreversible missteps. Joining me once again on this episode is Wendy McConnell. Wendy, how are you?

Wendy McConnell: I'm good. Thanks for having me.

Eric Blake: Absolutely. So I am, as you could probably already tell from the start of this episode, we are at the end of week one of a two week stint with our granddaughter, and I'm feeling it.

Wendy McConnell: Oh, that explains a lot.

Eric Blake: That doesn't it? So if I, so if you're just tuning in, I've had to redo some of these already we're getting through it though.

Wendy McConnell: We'll get that out though. You won't, you'll never know. That's right. But yeah that's great. Have you been having a blast?

Eric Blake: It's been amazing. But for those of you who might be tuning on YouTube, I haven't shaved, I probably have yogurt on my shirt and I've got purple paint on my shorts. I can tell you that right now.

Wendy McConnell: And how old is your granddaughter now?

Eric Blake: She'll be 18 months old, year and a half this month.

Wendy McConnell: All right. Yeah,

Eric Blake: so she and she is amazing.

I, but I do think, here's what I think I've learned. I think the whole thing with grandparents saying that they spoil their child and then send them back. I don't think that's true. I think it's you only have about three to four days of energy, so you gotta get as much spoiling in as you can and then you're done.

You have no more energy left. So you give them back then, I don't think it's the whole spoiling 'em and then sending 'em back to their parents thing.

Wendy McConnell: I think maybe at that point you're tired. You just give 'em the cookies. Exactly. You just give 'em the ice cream, you're like, ah.

Eric Blake: So her fav, one of her favorite things is watching videos of herself.

So she'll look at me and point at my phone and say me.

Wendy McConnell: Could you imagine if we did that when we were kids? I would constantly be staring at myself.

Eric Blake: Yes. So it's been amazing. It's been a blast. But yes we're I'm feeling week one and we got another week to go. So we're gonna have to fight through it though.

Wendy McConnell: Can't wait for next week. Alright, so we're gonna be talking about divorce. I'm gonna pretend like I'm getting divorced even though I'm not getting divorced. Okay. So I will ask you all the questions that a divorced woman would want to know.

Eric Blake: I think one of the things I wanna do, I wanna share just a few, what I would call 'em just real life stories.

And these are clients, prospective clients that we've had conversations with. And I think it hopefully helps put some of these in perspective because I think it's one of the things, I hate to call 'em mistakes because I think it's really a flawed system to some extent. Lack of information, lack of education, whatever we want to call it when it comes to making these decisions, because it's just not out there.

You don't take a social security class in college, and as you get closer, you've got life, you've got kids, you got grandkids, you got all these different things, and then all of a sudden you find yourself either in the middle of a divorce or you're coming out of divorce and now you're saying, okay, social security should be pretty straightforward, right?

Should be AI claim, and I'm good. But that's not necessarily the case, and it's often not the case. So a couple of things I wanted to share, and one is one is a story. It's a recently new client where she's getting out of e and she's, obviously you're always getting out of these bad situations, right?

So maybe years before you consider yourself not getting out of it, but it's still relatively new within the last, last 12 months she's gotten a divorce. Really emotional, really tough a lot of back and forth. And this was unfortunately one of the things, you can almost put it on the shoulders of the advisor because in before the divorce was even over, he had recommended that she start Social Security benefits because she was eligible for Social Security on her own record.

But in reality, just taking a state, taking a step back and looking at her financial situation and what she most likely would have after the divorce was final, she would've had enough income to say I could, she could have covered her basic needs for quite a while. And so one of the things that happened when she filed is of course she filed earlier than she could have.

She could have actually delayed those benefits an extra couple of years. And an extra 16% or so on those benefits. Now, what is, it's not necessarily right or wrong either way, it's just that there wasn't really, from what she communicated to me, that Wizard wasn't a conversation about, Hey, if you do this, just be aware of this.

So I think that's one of the things you gotta be aware of, is just understanding that when you're going through an emotional situation as it is with with divorce. It's hard to look at all these things, but she, so that's why you, it's important to have an advisor on your side of the table that can help you evaluate those decisions for you and give you the information so you can make it what I would call an educated decision.

So for her, one of the things that we, in terms of just thinking about strategy, and we're gonna talk about five specific strategies here in a bit, but for her, we say, okay, let's step back and look at what you might be able to do. You, and back in episode 47, we talked about three little known social security strategies that might be available.

One of which is to, could she just suspend benefits and say, Hey, I'm gonna stop 'em here. I'm gonna let 'em keep growing and I'm gonna start 'em back up in a couple years. That would be an option. She could also basically withdraw her application. Say, Hey, I'm gonna pay back what I've received. Same thing.

Start from scratch and then let those benefits continue to grow. So that's a situation where, again, just knowing your options and having a conversation with a trusted advisor can be really valuable. So the second story, similar situations from an emotional perspective, coming out of a difficult divorce where she wasn't really in a situation where she was able to work, she didn't have a lot of influence on the financial decisions of the household.

So when she got divorced, she finalized the divorce. She wanted to work. She didn't, maybe she didn't necessarily have to, but she wanted to. You're also in that same kind of emotional condition of, Hey, I need, I probably need some income. I wanna make sure I'm even to cover my bills. So she say I'm 62.

Let me just start my spousal benefits, or what, at that point were ex spousal benefits.

Wendy McConnell: Okay.

Eric Blake: Again, seemed logical, right? But because if she also making the decision to work, she didn't realize or didn't understand the earnings test. So what actually ended up happening is she earned enough to basically cover her bills, but she also earned too much.

For her social security benefits, which means she was gonna have to pay a decent chunk back. So again, all logical decisions when you're going through it and thinking, okay, it gives me income. I can work, I can get my feet, get feet on the ground, get my financial bearings, set, set. Again, not understanding some of these rules when it comes to when to file, what I'm gonna be eligible for, and some of these critical decisions that you have to make, especially now that you're on your own.

The last wanted to share is, this one's a little bit different in that the divorce happened quite a while back from an age perspective. This particular client actually fell under what used to be some of these older rules where you could say, Hey, I could actually file what's called a restricted application.

I can file on my ex-spouse's benefits, but I actually allow my own benefits to continue to grow. In her case, she again, didn't know the strategy, so she said I'm gonna file, but she filed on her own benefit instead of her ex-spouses, which means once she did that was basically it. She was now receiving her own benefit, but it was significantly less than what she could have gotten had she gone through that other process and gone through the other strategy of saying, okay, I'm gonna file the restricted on my divorced spouse, let mine grow until I'm 70.

And it would've been significantly more. So my point of talking about this particular story is that now as we're looking at her retirement situation and she's preparing to retire. The formulas are a lot different than now than what they could have been because now we've gotta come up with other income sources.

So it might be working a little bit longer, working part-time. It might be having to draw a little bit more out of a retirement assets, those types of things that today we're having to make these decisions. Because of a, we'll just call it a mistake in the past, but a mistake of not knowing, not understanding that's even an option.

And again, that's where I feel like the misinformation, the lack of information out there is really what drives a lot of these decisions.

Wendy McConnell: And you can't change your mind. You can't change it up. Because it's such a costly mistake. So

Eric Blake: not at this point. And that's the thing. And again, understanding the rules.

So I'll go, I'll refer back to episode 47, where that withdrawing the application. You have 12 months when you file for benefits. You do have 12 months that you could withdraw that application, pay back whatever benefits you have received up to that point. But once you've passed that 12 month mark, that is it.

You don't have any do-overs. You get that quick little, small, little do-over window, but that's it. And then we start thinking about, okay, now we, that time is passed, how do we. Build around that. Now how do we build around the decision that was made? Still make sure you have the lifestyle that you want in retirement, but we have to do it a little bit.

We have to go about it a little bit different way. That's where the tax planning becomes so much more important and making those dollars last and paying as little in taxes as possible. Because one of the things that will eventually happen is she will be eligible for a. Survivor benefit off of that ex-spouse, but we don't know when that's gonna be.

Wendy McConnell: Okay.

Eric Blake: As many divorced women would like to know when that might be, but we don't. But that's gonna be the case. So she's gonna be able to understand that, hey, that's gonna be some, that's gonna be an additional income source at some point. We just don't know when it's gonna be.

Wendy McConnell: Okay. Gotcha.

Eric Blake: So that gets us through our strategy.

So we're gonna talk about five specific strategies that divorce women need to know. And this is, I'm gonna talk about, these are gonna be more probably after divorce. Again, it's gonna be very helpful to understand what these strategies are if you're going through a divorce right now, or you think you might be at some point down the road.

But these are more things understanding what happens after this has been completed. So the first thing is, this is number one. This is gonna be the most important rule, and that is know and understand the two 10 year rule for divorced spouse benefits or benefits based on an ex-spouse.

Wendy McConnell: Okay.

Eric Blake: So if you were married for 10 years and you are now divorced, you may be eligible for benefits based on that divorce spouse's record.

Now, this could be ex spousal benefits or survivor benefits. Now again, there's a key distinction we have to make there, and that is xp, spousal benefits or when the ex-spouse is still alive. Survivor benefits are when the ex-spouse is deceased. Those are not the same. I hear that the confusion a lot and thinking about when I say the word ex-spouse.

Some people realize what it means and that it's a benefit They can receive up to 50% of that spouse, that ex-spouse's social security benefit, or they think it's the survivor benefit. But those are two separate benefits. You've got ex spousal benefits and you've got survivor benefits. You only make sure you understand that distinction.

Wendy McConnell: Okay.

Eric Blake: So if you're unmarried, and we're gonna talk about filing de covered ups of the basics here in the 10 year rule, but if you're unmarried, this may allow you to claim up to 50% of your ex-spouse's full retirement age benefit if it's higher than your own retirement benefit. For this, you gotta be at least 62 still.

So that 62 rule still plays. And we're gonna, again, we're gonna talk about filing strategies and timing just a little bit. But again, just understand that's the ex spousal benefit is up to 50%,

Wendy McConnell: not more.

Eric Blake: This actually is where, what came into play in that, in one of the stories I was sharing in that she was eligible, she was 62, she was eligible for, to receive a spousal benefit.

But in terms of the timing, it just wasn't the right timing because she, again, she wanted to work and she didn't understand the earnings test component. Now, here's one. This is a really tricky piece of this social security puzzle that I always talk about because with the frequencies, we just had that last episode talking about great divorce and how the frequency of that actually if there's, if you're getting married or you're getting divorced and you're fifties and you happen to get remarried, one of the things that could happen is I got divorced, I've gotten remarried, but maybe that marriage doesn't last 10 years.

If I got married in my remarried, in my fifties. Maybe that marriage only lasts, 10, nine years. But I'm in my early sixties now. If you happen to start spousal benefits off the current spouse and you divorce in less than 10 years, you actually could lose those spousal benefits. Those spousal benefits could stop.

Wendy McConnell: So what about the first husband? Or the first spouse,

Eric Blake: So you might be a, so if you, if it depends on the circumstances. So again, depends on whether that divorce or that marriage was 10 years or not. So that's where you gotta look at if you've got multiple marriages, how long do each of those marriages last and which ex-spouse could I potentially be eligible for benefits based off of?

Wendy McConnell: Okay, so if you're, say you have two that are over 10 years, can you pick which one you want?

Eric Blake: If you depends on, so again, if we're talking about ex spousal benefits which is 50% of that living ex-spouses benefit themselves. As long as both were 10 years and you are not currently married, you pick the highest one.

Wendy McConnell: Oh. But if you're married, you go with

Eric Blake: right now we're back over to spousal benefits versus ex spousal benefits. Correct.

Wendy McConnell: Okay. But one more question. Sure. So if you're in year seven of your current marriage, but you're 64. You wanna file, can you file X at that point? No. No, because you're married.

Eric Blake: Once you've gotten married, you are no longer eligible for ex spousal benefits, period. You're only eligible based on that current marriage.

Wendy McConnell: Okay. All right. Gotcha.

Eric Blake: Makes sense. Little more CLI as about, as clear as mud.

Wendy McConnell: Yeah. So just don't get married again.

Eric Blake: Yeah, exactly. Just don't worry about it.

So now let's talk about remarriage. 'cause this is, again, it can be so tricky and it is, I, there's so many stories that I've heard where it caught women off guard when it came to remarrying too soon. There's one story I heard where she was like a couple of months from turning 60. She went, she got remarried because obvious she didn't understand the rules.

The ex-spouse passed away within shortly after she turned 60. She might've been eligible for survivor benefits, but she wasn't. So it gets really complicated with this stuff. So I wanted to talk about, so strategy two is just understanding the impact of getting remarried. So first thing to know is if you're remarrying before the age of 60, that will typically disqualify you from receiving divorce spouse benefits.

Again, just what we talked about because you're now married, but also maybe we'll call it, more importantly, if you're remarried before the age of 60, you're no longer eligible for Survivor benefits based on a former spouse's record.

Wendy McConnell: Okay?

Eric Blake: So if you do have intentions of getting remarried, and again, we don't always wanna make these decisions based on financial circumstances, you gotta be aware of these things.

So if you, if your ex-spouse is deceased. Plan to get remarried after 60 if it's financially beneficial, or at least again, understand the rules. So if you get married before the age of 60, you're uneligible for ex spousal benefits. You're ineligible for expo survivor benefits, right? So if you're remarried after age 60, again, at that point, you can still collect survivor benefits based on a deceased ex-spouse's record, even if you are married.

So again, as long as that remarriage, that second marriage or third marriage, whatever it might be, happens after the age of 60, you're still gonna be eligible for survivor benefits based on a previous spouse. Should that spouse be deceased.

Wendy McConnell: So we can turn the tables then on the men we'll be like, you know when they, you told us when we were young I'm not ready yet.

I gotta sow my wild oats. Now we're gonna be like, Hey, we gotta wait till I'm 60. Sorry.

Eric Blake: That's right. Hey I buy, but as you and I would probably agree, if there's financial benefit, he's probably gonna be okay with that.

Wendy McConnell: It depends on who it's for.

Eric Blake: Yeah. So again, just one of those, again, critical pieces of understanding if you're gonna get remarried, which often happens.

We, that's obviously, that's the what happens these days in terms of the averages. But just understanding though, again, if we're talking about social security benefits, being aware of the ages that that can impact your eligibility for these di different benefits still becomes part of the, a big part of the puzzle.

Wendy McConnell: Okay.

Eric Blake: So next we wanna talk about survivor benefits being more valuable than spousal benefits depending on the circumstances. So again, we talked about this, if your ex-spouse is deceased and you meet those eligibility criteria, so we talked about the 10 year rule that if you have to have been married for at least 10 years, you have to be over age 60.

So this is again, some of the key distinct distinguishing pieces of the survivor benefits versus the ex spousal benefits. If you're at least age 60 survivor benefits, you can actually be eligible for survivor benefits at or as early as age 60 versus retirement benefits on your own record or ex spousal benefits being 62.

You could actually qualify for survivor benefits as early as age 60, which can be up to as much as a hundred percent of that ex spouse's benefit versus the 50%. Again, always keeping in mind, we're gonna talk about timing here in just a second, but when we're talking about timing, the earlier you start any benefit yours, spousal benefits, ex spousal benefits survivor, the earlier you start, the lower your benefit's gonna be from that point forward, right?

It's also important to know that you can even switch strategies with survivor benefits, and what I mean by that is depending on the circumstances and the age at which that individual deceased. You can claim survivor benefits first and then later switch to your own benefit or vice versa. You can switch, start with your own benefit and then switch to survivor benefits.

In most cases, what you're looking at doing is delaying the larger of the two benefits the longest

Wendy McConnell: so they can build up. So

Eric Blake: whichever benefit is higher, you wanna let that one, you wanna delay that one as long as possible.

Wendy McConnell: Okay. Because that'll build up, right?

Eric Blake: So Survivor benefits again, so you can start 'em as early as age 60, but the maximum benefit is almost always, and most circumstances is gonna be age 67 or full retirement age, or your own benefit.

You can start as early as 62, but it maximizes the highest benefit as age 70. So if your own benefit happens to be higher than your survivor benefit would be, you could say if, depending on, again, depending on your work, what your working situation is, I might start Survivor benefits at 65, and then when I turn 70, I'm gonna switch to my own.

'cause my benefit will continue to grow all the way to age 70, but I'll still have that income starting at 65 from my survivor benefit. Or I might say, I'm gonna start my benefit at 62 if I'm in a position to do allow my survivor benefit to continue to grow. And then at 67 I'm gonna file for my survivor benefit.

So you have that ability to switch from one benefit to another when we're talking about your own benefit versus survivor benefits. And that's what's gonna help you maximize. Your overall social security benefit.

Wendy McConnell: Okay.

Eric Blake: And again, that's where it's going back to the case that I talked about where the the, in the client filed for her own benefit rather than filing for restricted benefit off of an ex-spouse.

But at some point, she's going to be eligible for, to switch from her own benefit to that higher survivor benefit whenever that time comes. Okay.

Wendy McConnell: Now,

Eric Blake: here's what I get a lot of when it comes to ex-spouse benefits. Here's the question I get a lot, and that is what happens? Does the ex-spouse know or does the ex-spouse benefit get impacted if I file for benefits off their record?

And the answer is no. So again, many women will worry about this, and not necessarily that they're worried about what they're gonna think or anything like that, but just the, if it was a difficult divorce, an emotional divorce, they think I've got, do I have to call this person and ask them questions?

Or do they, are they gonna find out if I do this and they're gonna call me? So the bottom line is, none of that matters. They're not, their benefit's not getting impacted. They don't even know that you've done it. If you're eligible for benefits, you might have to provide documentation. So you may a marriage certificate and a divorce decree to prove you're eligible for these benefits, but they're never gonna know.

Not only does it not impact that your ex's benefit if they're currently married, it also doesn't impact their current spouse's benefit or even evil previous ex-spouses. So it's really focusing on what's best for you. So in understanding your situation, what's gonna be your best option, whether it's again, ex spousal benefits or.

Survivor benefits. They don't have to know that you've done anything. They don't have to get their permission. You don't have to do anything. Just prove that you're eligible. File for what you're eligible for, and go from there.

Wendy McConnell: They want nothing to do with the acts. Once they're done, they wanna be done

Eric Blake: right and you hope that, you hope there's a friendly situation there.

But you know what? Unfortunately, that's not always the case. Not always. So again, the biggest worry. And again, whether it's, whether you're worried about it because you care about 'em or you worried about it because you don't care about 'em, it doesn't really matter.

The biggest thing is just making the best decision for you and knowing that they're, it doesn't impact them one way or the other.

Wendy McConnell: Got it. And he won't even know. So that's the best news possible.

Eric Blake: Exactly. Alright, so now this is a, don't to call this the primary strategy here, but timing is everything and that's when we want to talk about filing for benefits, especially what the impact is of filing. For early reduced benefits.

So again, anytime you file for any type of benefit before your full retirement age, it is gonna permanently reduce your ex spousal benefits, your survivor benefits, or your own benefit. That's just the way it's gonna be. As an example though, for a divorced spousal benefit, if you take it at 62, it's gonna be reduced in to about 32.5% of your ex-spouse's full retirement age benefit, where the maximum benefit would be 50%.

And that could be a pretty significant difference if you're talking about, if the ex-spouse's benefit is 3000, 50% of that is 1500. If I'm down to closer to, a thousand, that extra few hundred bucks a month could make a significant difference. Now, again, depending on cash flow, you always have to evaluate these based on your individual cash flow situations.

But just know the earlier you file, the more your benefit is gonna get reduced. Now, here's a really key point when it comes to ex spousal benefits being different than spousal benefits. And that is for you to file for ex spousal benefits, you have to be 62. Your ex-spouse has to be 62, and the divorce has to have been in at least two years ago, but the ex-spouse does not have to have filed for their own benefit.

Wendy McConnell: Oh, okay.

Eric Blake: Makes sense. So if you're married. You can't file for spousal benefits until your spouse has filed. That's not the case for ex spousal benefits. So again, depending on the circumstances, your ex-spouse only has to be age 62 or greater, and the divorce has to be at least two years ago, at least two years old.

And in that case, you can actually file for benefits whether they filed or not.

Wendy McConnell: Okay. That's

Eric Blake: good news. And basically it's not so that you don't get penalized for whatever decisions they might make.

That's the bottom line. So if he, because they

Wendy McConnell: might not file until they're 70,

Eric Blake: right? That could be exactly the case or they filed, or worst case, they filed early, they filed a 62 Oh.

And so it doesn't impact you. So again, you have the ability to base your own benefit off of what's best for you, not what any bad decision or good decision. Either way, whatever decision they may have made, you're not dependent on whatever that decision was. Okay? So that's, that can be a critical factor, especially if we're talking about a cash flow situation where again, you, maybe you've got a limited work history, divorce is finalized, it's gonna be, it's a couple years old and you're in a position where I need income.

And he hasn't decided to, again, maybe he's decided to delay benefits, whatever the case might be, that gives you a chance to make that decision. Okay. Should it, does it make sense for me to start my income

Wendy McConnell: right

Eric Blake: now again with Survivor benefits? Again, you can take benefits as early as age 60 or even age 50 if you happen to be disabled.

So again, survivor benefits are age 60 versus your retirement benefits being 62. But again, if you start benefits early, you start 'em as early as age 60, it's going to be significantly reduced from what your full potential benefit might be. So that's where we really gotta make sure we're understanding what these rules are, and that's not, again, so many times unfortunately, it's a, an emotional decision to say I'm just gonna do it.

Rather than looking at all your options, in which case delaying benefits is always gonna result in a higher benefit down the road. And so you wanna try to, at least as best you can, just be able to step back, consider what your options are and what's gonna make the most sense as to when you file.

And ideally talk to a financial advisor to make sure that you understand what your options are to lay those out and say, okay, here's what your option one would be. Here's the positive, the pros and cons. Here's option two. Here's what the pros and cons are. Here's option three. What are the pros and cons?

So again, you can make, hopefully an educated decision versus an emotional decision when it comes to any of these options that may be available to you after a divorce is final.

Wendy McConnell: Okay.

That's good to have options.

Eric Blake: It is. And I think that's the biggest thing, like I said from the very beginning it's just understanding what these options are and you feel like you only have this one single thing I can do.

In most cases, that's not gonna be correct. So being able to know who to ask, where to ask whether, again, it's a financial advisor, whether it's your whether it's your attorney, have them connect you to the financial advisor, especially if you're in the middle of going through a divorce or it hasn't been finalized.

There's what are called cdfa, certified Divorce financial analysts that can help with some of these things. As Jill in our conversation last week, talked about, talk to a financial planner who has experience with a retirement income to lay out what your options may be in that case to help you negotiate.

Maybe that gives you a little bit more negotiating power when it comes to how the assets are gonna be separated. How much are you going to get of the retirement assets? Depending on what the circumstances are, does one spouse have more retirement assets in their name than the other? And how we, how do we end up getting those assets split in a matter that's appropriate for you?

Wendy McConnell: Okay. Got

Eric Blake: it. And again, like I said at the very beginning, social security is not negotiable. That's not something you negotiate, either eligible or you're not. But understanding what your options are gonna be or what your social security picture can look, will look like, might give you more ability to evaluate some of these other assets that might help provide income down the road.

All right, so just a quick recap of what we talked about. So again, you may be eligible for ex spousal or ex spousal survivor benefits if you've been married at least 10 years. Again, that's a key date, and it is exactly 10 years At a minimum, there's no nine and a half years, 9.25, 9.1. It is 10 years. It has to be exactly 10 years because you're gonna have to provide a divorce decree, a marriage certificate, and a divorce decree to verify your eligibility.

So again, it's important to understand that. Getting divorced before the 10 year mark could mean you lose benefits you're already receiving, right? So if you've started spousal benefits and your marriage ends before that 10 year mark, you might actually lose those spousal benefits. And if you don't have earnings on your own record, you may basically be out of social security benefits completely at that point.

So again, it's something to be aware of as you start planning what your future's gonna look like. We talked about claiming too early, it can reduce your income for life if possible, and this is a very individualized decision. Delaying maybe your best long-term option. If that's a, again, if that's something that's a, that you can do.

Again, if it's a cashflow situation and you're down to you you're pension. Every penny again, at least make an educated decision about whether, yes, yeah, this is the best option for me is to go and just start my benefits. We talked about remarriage timing can impact your eligibility as well. So if you're planning to get remarried, just understanding what the rules are, what those ages are, what those critical ages are.

We talked about survivor benefits that can be substantial. But aren't guaranteed in timing. So you wanna plan conservatively with that. So if you think you're gonna be, if you're gonna be eligible for survivor benefits off of an ex-spouse, just have an idea of kind of what that impact's gonna be and know that it's out there.

But again, it's not something we can plan 'cause we just don't know when it's gonna happen.

If you work before full retirement age. Again, your benefits could be reduced by the earnings test. If you earn above a certain amount, it could actually impact your benefits that you're receiving currently.

Now, it's important to know that these, you don't lose those benefits permanently. They're simply delayed. They're recalculated into your benefit once you reach for retirement age. So you do get those benefits back. The hard part is if I had to write a big check in 2025 and then I'm not getting. Anything back until say 2030,

Wendy McConnell: right?

Eric Blake: And then it's just recalculated versus being, I don't get a lump sum in 2030. It's just recalculated back into my monthly benefits. I might have to write a check for, $10,000. I've heard stories of up to $50,000 of I had to write a check back for 50 grand because that's how much I made. So again, just understanding the earnings test can be pretty impactful.

Also understanding what your options are when it comes to some of these things that if I did maybe make a mistake, do I have the option to withdraw my application again? I might have to pay all those benefits back, but it might be my better option. Can I suspend benefits and stop my benefits now?

Now that's only available to you at full retirement age, but it's something to be aware of. So again, some of these key strategies that a lot of people aren't aware of. I think that's the key takeaway. That's what I wanted to make sure we got out of this episode. Wendy, any other thoughts, questions in terms of just the action items that are for today's episode?

Wendy McConnell: No. I just wanna tell women to wait until 60.

Eric Blake: Every based, everything on financial decisions. That's always a good route.

Wendy McConnell: Exactly. It's all about the money. No, I'm all good.

Eric Blake: Thank you once again for joining me on this episode, Wendy, thank you to our audience for tuning in as well. If you are getting divorced again, be sure to consult a financial planner, a financial coach, a certified divorce financial analyst that can provide insight on your options before that divorce is settled.

If you're on the other side of divorce and you're trying to put the pieces of your new retirement puzzle together and you're looking for personalized retirement plan that helps you make smart decisions around income, investments and taxes, especially after divorce visit, get my simply retirement roadmap.com to schedule your free retirement assessment.

That is it for today's episode as a reminder for all the links and resources mentioned today. You can go to the Simply Retirement podcast.com. Don't forget to follow, and share our show. Until next time, please remember, retirement is not the end of the road. It's the start of a new journey.

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