When to File for Ex's Social Security Benefits?

Dear Retirement Adviser,

I just turned 62 and am divorced and single. My ex-husband will be 63 years old this year. Is it possible for me to collect on his Social Security now? I am still working, but our unemployed adult son is going to college. Our finances are really tight since I am the only income earner in our home. My plan is to work until I am 66. If I can tap my ex-husband's Social Security soon, what is the impact on my own Social Security benefits?

Thank you,

-- P.D. Divorced

Dear P.D., If your ex-husband has not applied for retirement benefits but can still qualify for them, you can receive benefits at your current age of 62 based on his work record. That's if you have been divorced at least two years, your marriage lasted more than 10 years and you didn't remarry, as you said. Your letter doesn't say how long you were married. So, I'm going to assume you made that 10-year milestone.

If you file for Social Security benefits prior to your full retirement age of 66, your benefit is first calculated based on your own work record. If the spousal benefit from your ex-husband's work record would result in a higher spousal benefit, you get the higher amount. But it's considered a combination of the two benefits. After that, you may not refile at your full retirement age to get a full retirement benefit based on your work record. You will suffer a permanent reduction in benefits if you file before your full retirement age.

The fact that you're still working can also mean your earnings reduce your benefit amount. If you're younger than full retirement age for the entire year, the Social Security Administration deducts $1 from your benefit payments for every $2 you earn above the annual earnings limit. In 2013, that earnings limit is $15,120.

The interesting option for a divorced spouse is to claim a spousal benefit at full retirement age and then earn delayed retirement credits on your work record until age 70. That's when you file for benefits based on your work record.

If money is tight with your son in college, he could take out some student loans. He's the one that's going to potentially earn a return on that investment, not you. Taking a big reduction in your retirement benefits to free up some short-term cash in your monthly budget fails to take into consideration your own significant retirement income needs. Here's a case where you need to think about your needs first before those of your son.

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