This Huge Life Decision Could Actually Cancel Your Social Security Benefits

Retirees are constantly planning their next adventure. Whether it's a months-long trip around the world or a weekend visiting their grandchildren, every day is filled with possibility and plenty of options. Retirees who have planned diligently for these golden years may find themselves living a retirement lifestyle that's all fun with little-to-no work. But retirement is a long-running plan that's executed in the little decisions of everyday life. As a younger worker, you'll need to make the conscious effort to put away money each month to save for these later years (how much depends on when you start and what your goals look like). But life decisions that impact your retirement finances don't just exist in the earlier, pre-retirement years. Naturally, budgeting choices will have to be made on a regular basis, and numerous other features of modern life can play a role, too. One life decision that many retirees consider can actually transform the value of their Social Security benefits. You might not even be aware of the effect until after it has happened, and your Social Security picture changes.

Social Security is a federal program that lifts tens of millions of people out of poverty and provides (or will provide) a key financial addition to nearly all American seniors' fiscal health. But it's complicated. There are lots of rules that impact the type and volume of benefit you receive, and after many years taking checks, you might not remember how your benefits are calculated. It's worth revisiting if you plan on taking this big life step.

Millions of Americans are entitled to take a spousal benefit instead of a check based on their own Social Security record. Anyone who is currently married or is divorced but remained married to their ex-partner for at least 10 years can claim a spousal benefit based on their partner's working record. This is equivalent to around 50% of their own benefit and it has no effect on their retirement planning or Social Security entitlements. This is particularly valuable for spouses who made the decision to stay at home — foregoing traditional work — to raise the family's children, for instance.

Whether your spouse has passed away (and you now receive what's known as a survivors' benefit, instead) or you are divorced and earn the spousal benefit instead of a check for your own benefit, getting married to someone else will stem the flow of these funds. You can only receive a benefit based on your own record or your most applicable partner's (a current rather than former spouse, in this case). However, if you were to be married to two different people for 10 years each or have the true misfortune to be widowed twice, you would be entitled to the highest benefit amount among the two spousal or survivors', or your own. Functionally, this means that if you've been drawing a benefit off the record of an ex-spouse as a retiree, your financial picture could change significantly if you meet someone new and decide to get married again.

Getting remarried doesn't exactly translate into a zero-sum "loss," though. As a newly married individual, you won't just lose previous benefit eligibility, but rather assume new eligibility while shedding old benefit options. Essentially, you'll be able to receive benefits based on the Social Security record of your new spouse. In practice, this might translate into a reduction in benefits or an increase, if your new spouse earned more, averaged over their working life, than your previous partner. You may also choose to marry someone who isn't eligible for Social Security benefits themselves, leaving you to receive a small benefit based on your own record (and providing a modest benefit to your spouse instead) or none at all. 

The reality is that every circumstance will be unique. A widow or divorced senior will have to consider the financial ramifications of a new marriage before tying the knot, similar to a younger person's wholistic decision making surrounding this big life choice. There's no objectively correct way to live your life, and this remains true for seniors looking for love and companionship. The only thing you can do is a bit of research to make sure you're making the best overall decision for you and your life's needs, goals, and aspirations.