People stay married for all kinds of reasons. For the kids, because of religious convictions, the belief you can work things out. All of these and more contribute to people remaining in unhappy relationships. Retirement is another.
In certain situations, after a long marriage, spouses may be entitled to a share of retirement benefits, like pensions, or to collect Social Security based on a former spouse’s work history.
One recent caller finds himself in the midst of a lengthy marriage he doesn’t see going the distance. He has concerns about his retirement, his pension, Social Security, and other issues that come up in longer marriages that end in divorce.
Related Reading: Social Security and Divorce
Listen to the Call Below:
Caller: “How long do you have to be married–I’ve been married for seven years and I can see this not working out–how long do I have to be married before the wife qualifies for my Social Security and retirement? How long do you have to be married before they qualify for that?”
Rick: “Sure, let me speak to the retirement issue. Unfortunately, it’s not a bright line I can just tell you, ‘X many years.’ What happens is when you get married, you form what’s called a community. Think about it like going into business with your new wife.
“Ultimately, when you’re creating a pension or retirement, it’s either based on the number of years and the income you were making during that period of time, which is kind of an older school pension. Or it’s going to be like a 401k, where you can actually see the dollars go in and accumulate.
“What happens though is this:
- If you get married, let’s say you started accumulating a pension, what you’ve earned prior to getting married is considered your separate property.
- Then let’s say you’re married for ten years then divorce. You now have created ten years of community property in that ‘pot’ if you will.
- Now you’ve been divorced for another ten years before you actually start collecting your pension.
“Ultimately, there’s a formula that gets created back in the court when you get divorced. That creates the percentage of the community property she’s entitled to.”
Related Reading: What’s in a Divorce Decree?
What About Social Security?
Danny: “Including Social Security?”
Rick: “Well, Social Security is going to be a little bit different.
Danny: “Then how about pensions? I’ve been paying into my pension since 1967. So would that be mostly mine, or the person in my shoes?”
Rick: “Yeah, let’s say you’ve been paying into a pension for…[attempts to do math out loud] is that really 50 years?
Danny: “Yep. Wow. Yeah, when I first did Bewitched.”
Rick: “You don’t look a day over 30. So you’ve been paying into a pension for 50 years, and let’s say when you’re divorced, how long were you married by the way?”
Danny: “Well that’s…[Inaudible tomfoolery]…I was married for 17 years.”
Rick: “Let’s say that 17 years of it, let’s call it 51 then it’s going to work out to be pretty good. So 17 years of a 51-year pension contribution is 1/3.”
Danny: “So that’s what she would get if she went after it?”
Rick: “No nooo. [Rick gives Danny his ‘slow your roll’ face]
“That means the community portion was 1/3.
“Your separate portion was 2/3.
“So she gets half of the 1/3.
“So in this particular case, she gets 1/6.”
Danny: “The nicest thing about that girl is that she didn’t go after it.”
Rick: “Math is fun.”
Danny: “Math is our friend.”
Related Reading: Should You File For Bankruptcy or Divorce First?