I don't want to retire. My wife didn't work. We're considering divorce so she can get Social Security early

Barry, 53, and his wife Michelle, 58, are planning for their retirement. Michelle has been a stay-at-home parent for the majority of her adult life, and despite not having the credits to qualify for Social Security, she isn’t interested in re-joining the workforce after decades of raising and taking care of the kids. Barry, meanwhile, loves his job and doesn’t plan on stopping anytime soon. He also supports his wife’s decision after her years of service being a full-time mom.

Fortunately for them, Social Security doesn’t just offer benefits for workers. Spouses — even ex-spouses — can be eligible to collect retirement benefits based on their partner’s work record.

The rules surrounding the claiming of spousal benefits are complicated, but one notable quirk is that spouses must first wait for their partner to start collecting Social Security, while eligible ex-spouses may be able to collect checks as early as age 62.

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So, does that mean couples in this situation would benefit from getting a divorce? Not so fast.

Here’s what our married couple needs to know before potentially untying the knot.

Rules for claiming spousal benefits

First, let’s lay out the rules for claiming spousal benefits. Spouses can claim up to 50% of a partner’s full retirement amount, but only once their partner has started collecting benefits. The earliest age to claim is 62, but spouses still must wait on their partners.

Ex-spouses, however, can sometimes claim benefits earlier — as long as the ex-spouse is unmarried, the couple’s marriage lasted at least 10 years, they’ve been divorced for at least two years and both former partners are 62 or older. In this case, an ex-spouse doesn’t have to wait for their former partner to collect benefits.

So, if they divorced, Michelle could theoretically start collecting spousal benefits before Barry, but she’d have to wait until she turns 67, which is nine years away.

Of note, similar to standard retirement benefits, if a spouse claims benefits before their full retirement age (67 for those born after 1960), they will receive a reduced benefit. In Michelle’s case, either way, she’d be at full retirement age when she becomes eligible to claim.

What are the downsides to this plan?

While this approach might seem beneficial, it carries risks. First, even if they divorce, Michelle can’t collect benefits for almost a decade. If money is tight, this won’t solve their current cash flow problem. Here are some other downsides to consider:

They could get flagged for fraud

There’s a risk that the Social Security Administration (SSA) could flag the divorce as fraudulent. If the agency suspects the couple only divorced to game the system, while continuing to live as if they were married, it could result in serious penalties. The SSA may investigate suspicious claims — including those that involve filing for benefits earlier than usual.

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The financial and emotional impact of a divorce

The end of a marriage — even if it’s only on paper — comes with its risks and costs. Legal fees, the hassle of dividing assets and the emotional impact might outweigh any benefits. Divorce attorney fees can total thousands of dollars, which can be a significant burden for if a couple already faces financial challenges. There may be other impacts as well, such as the splitting of investment accounts, such as a 401(k), that could impact their growth.

Complex financial planning

Divorce can impact other areas of financial planning, including taxes, health insurance, pensions and survivor benefits. Once divorced, one spouse may no longer qualify for their former partner’s employer insurance plan. They must also be aware that they may no longer be the designated next of kin for their ex, which can have complicated medical and legal repercussions.

What other options does this couple have?

Rather than divorcing, Barry and Michelle may want to explore other ways to strengthen their finances and prepare for their golden years. Depending on their situation, this might include:

Working part-time or freelance: If the stay-at-home spouse can work even a few years, they may qualify for their own benefits. It only takes 10 years of modest earnings to earn the 40 credits needed for eligibility. At the very least, this could bring in some extra cash.

Delaying Social Security: Spousal benefits may be based on the working partner’s full retirement age, but the worker can earn a higher benefit if they wait until age 70 to claim.

Reducing spending or downsizing: The couple may want to consider downsizing their home and cutting down on non-essential spending. This could help them stretch the working spouse’s income further.

Divorcing solely to access Social Security benefits might offer short-term gain, but it comes with risks and long-term complications. Instead, it might be better to plan a roadmap to retirement together — potentially with the help of a financial advisor, who can offer them different strategies regarding work and Social Security going forward.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.