Dear Quentin,
I am thinking about divorce. My husband inherited a few million dollars from his father when he passed away. Am I entitled to any of that should I choose to divorce? I live in Texas. He doesn’t share his information on his bank accounts so I have no idea what I would be entitled to.
He forced me to take Social Security at 62. I am 65 now and have been collecting Social Security since I was 62½. I claimed my benefits early because my husband never would give me money to put in my account.
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Also, we have five rental properties. Two of them were inherited, but the rent goes into a joint checking account. Would I still get half of the rental money every month if I filed for divorce? It’s time for a new beginning.
Wife in Texas
Dear Wife,
A question mark hovers over your letter.
If the rental income from these properties was going into a joint account, you probably had considerable cash at your disposal. I suspect that your reluctance to access that money ultimately led you to take Social Security at 62. Sometimes, strings are invisible, and if you felt forced or coerced into retirement, you could have felt that you were living under your husband’s rules. Accessing those benefits gave you independence, even if it did so at a price.
If this is the case, I’m sorry. I’m sorry that you did not feel you had the same right to community property as your husband. I’m sorry that you lived a more modest lifestyle because your husband maintained a tight — or controlling — hold on the purse strings. And most of all, I’m sorry that this has chipped away at your self-confidence and happiness over the years and affected how you feel about both your marriage and your place in the world.
That said, you made a decision and, hopefully, it has given you the freedom and power to make other decisions, leading you to the place you are now. If taking Social Security at 62, even if that meant getting lower payments, has helped you discover what you, at 65, want for the rest of your life, it was worth it. Only you can decide, but financial control is a form of domestic abuse, and if you raised your kids and were a stay-at-home mom, it’s all the more egregious.
To answer two of your financial and legal questions bluntly: No, you are not entitled to a share of your husband’s inheritance in the event that you divorce, unless that money went into a joint bank account and the funds were commingled. And rental income from separate property — that is, properties that your husband purchased prior to your marriage — does not commingle those properties. The money in the joint account belongs to both of you, so talk to an attorney.
Claiming Social Security at 62
You get 100% of your Social Security benefit at full retirement age, which is 67 for anyone born in 1960 or after, and you receive a lesser amount if you claim at any time from the age of 62 until full retirement age. If you wait until age 70, you receive roughly 8% more per year. Some advisers say it can work out roughly the same whether you start taking your benefits at 62 or at 70 — it all depends on how long you live. You, however, had other, more immediate considerations.
The financial argument suggests people should delay their Social Security benefits as long as possible, especially if they are in good health. Virtually all American workers age 45 to 62 should wait until beyond age 65 to collect Social Security, according to this working paper from researchers at Boston University and the Federal Reserve Bank of Atlanta. More than 90% of people should wait until they reach the age of 70, yet only 10.2% appear to do so, they said.
To put that in context for your retirement: Claiming Social Security early reduces household lifetime discretionary spending by $182,370 for the median worker who is near retirement, the paper concluded. “Optimizing would produce a 10.4% increase in typical workers’ lifetime spending,” the researchers wrote. “For one in four, the lifetime spending gain exceeds 17%. For one in 10, the gain exceeds 26%.”
Your situation is not unique. Nearly half of workers (47%) retire early, and many cite reasons more serious than yours, according to a report by the Employee Benefit Research Institute, a nonprofit based in Washington. Nearly a third cited a financial hardship, such as a health problem or disability not related to COVID-19, while nearly a quarter said they retired due to changes at their company. Some 38% said they could afford to retire early.
Godspeed on your new life, however you choose to pursue it.
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