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The importance of obtaining a Social Security Statement during divorce

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An individual’s Social Security Statement can be a valuable resource in your divorce financial planning. If you have been married over 10 years, and have spent some or most of those years out of the workforce or working part-time, then you might be eligible to collect one half of your ex-spouse’s social security, also known as “derivative benefits”. Here is why you need to take a closer look at the actual statement:

  1. It provides earnings and employment history. The Social Security Statement is a great place to look for historical employment earnings. It is valuable to understand the earnings history and trajectory of both parties in a divorce. If tax returns and other documentation are being with-held by your spouse the Social Security statement can provide a valuable baseline.
  2. It helps estimate retirement and disability benefits for long term, post-divorce financial planning purposes. Understanding the long-term cash flow is very important when negotiating a financial settlement. Having details of the Social Security administration’s estimated benefits can help you understand your future cash flow and plan more effectively for the future.
  3. It will identify if there is a public pension. A worker who participates in many types of governmental retirement systems may not have paid into the Social Security system. Some may pay into Medicare but not Social Security. You can see this if the worker’s statement has wages in the Medicare taxed earnings column but not the Social Security column. Using the Social Security statement, we can uncover the existence of a previously undisclosed pension.
  4. It can be used as a baseline to calculate derivative benefits available to a former spouse. In a marriage over ten years you can receive derivative benefits on the record of your former spouse. The derivative benefit is equal to one half of the former spouse’s benefit which can be found on their annual statement. This is useful for long term planning and can be important in long term spousal support negotiations.
  5. It provides Social Security and Medicare tax details. We often need to estimate incomes and determine the Income Available for Support to be used in negotiations. A common mistake occurs when the 6.2% Social Security tax is applied to the worker’s entire income. Instead the tax should be applied up to the maximum wage base for Social Security taxes each year. If you apply the tax to $300,000 of income the net, after tax income will be understated by over $10,000 per year.
  6. It shows if employee is subject to Government Pension Offset Provision (GPO) or Windfall Elimination Provision (WEP). Those workers mentioned in #3 above may find themselves subject to the GPO or WEP and end up receiving less benefits than they expected if not careful. It is always important to understand how these government provisions affect an individual in divorce. The Social Security Statement even talks about them in the bottom right hand corner of page 2 in its current lay-out.
  7. It identifies the existence of tax deferral vehicles such as deferred compensation plans and retirement accounts. If the numbers reported under Medicare wages don’t match those reported in the Social Security earnings column there may be tax deferral vehicles like deferred compensation plans that are being used. The worker may also have simply hit the wage base maximum after which Social Security taxes are no longer incurred but Medicare taxes are.
  8. It shows an accurate picture of earned income (vs. what was reported). In RI and MA, an individual involved in divorce proceedings must file a Financial Disclosure detailing their income and expenses and sign it for accuracy under penalty of perjury. This doesn’t keep people from reporting incorrect figures. If the Social Security Statement doesn’t match what is reported on the declaration, we can help calculate that discrepancy.

The Social Security Administration provides an online version of taxpayers’ statements. The online version is now available at

For more information on social security and divorce, please visit

Make sure to gather copies of the most recent statements available and Collaborative Divorce Strategies can help you uncover a wealth of financial knowledge. Get in touch at