When divorcing couples sit down to divide their assets, they typically focus on the house, the retirement accounts, and the savings. What most couples overlook—and what many divorce attorneys fail to address—is Social Security. Unlike a 401(k) or a pension, Social Security benefits cannot be split with a court order and transferred to an ex-spouse. But that does not mean Social Security should be ignored. For many couples, particularly those divorcing after age 50, future Social Security benefits represent one of the largest assets either spouse will ever have. Ignoring them can lead to a settlement that looks equal on paper but is deeply unfair in practice.
The Problem: Social Security Cannot Be Divided, So It Gets Ignored
Federal law prohibits the division of Social Security benefits in divorce. A Qualified Domestic Relations Order (QDRO) can transfer a portion of a 401(k) or pension to an ex-spouse, but no equivalent mechanism exists for Social Security. The result is that many divorce settlements simply pretend Social Security does not exist. The couple divides the house equity, the IRAs, and the checking accounts, while the spouse with the higher lifetime earnings walks away with a future stream of Social Security income that may be worth hundreds of thousands of dollars—entirely unaccounted for in the settlement.
What Massachusetts Law Says About Social Security in Divorce
In Massachusetts, the Supreme Judicial Court has directly addressed this issue. In Mahoney v. Mahoney (1997), the court ruled that although Social Security benefits cannot themselves be divided, courts should consider anticipated Social Security benefits when dividing other marital property (1). The logic is straightforward: if one spouse will receive substantially more in Social Security than the other, a truly equitable division of the couple’s total wealth should account for that disparity—even if the mechanism for achieving equity is an offsetting adjustment in other assets. Despite this clear legal guidance, the vast majority of divorce agreements in Massachusetts fail to account for Social Security at all.
How Large Is the Social Security Disparity?
The numbers can be striking. Research from the Social Security Administration has found that women who divorce and never remarry have average monthly benefits of roughly $1,000, while continuously married women—combining their own benefit with the boost from their spouse’s record—receive average household benefits exceeding $2,200 per month (2). Over a 20-year retirement, that gap amounts to nearly $300,000 in additional income for the married couple. When one spouse spent years out of the workforce to raise children or support the other’s career, the Social Security gap can be even larger. Urban Institute researchers Barbara Butrica and Karen Smith have documented that the type of Social Security benefit a divorced woman receives—whether based on her own earnings, her ex-spouse’s earnings, or survivor benefits—dramatically affects her economic well-being in retirement (3).
The Present Value Approach: Putting a Dollar Figure on Future Benefits
To factor Social Security into a divorce settlement, you need to calculate its present value—the lump sum today that is equivalent to a future stream of monthly payments. This calculation accounts for the time value of money, life expectancy, and the age at which benefits will begin. A present value allows you to compare Social Security directly with other assets: you can weigh the present value of a spouse’s Social Security against the current equity in the family home or the balance in a retirement account. Attorney Julia Rueschemeyer of AmherstDivorce.com has developed a step-by-step guide to help divorcing couples calculate the present value of their Social Security benefits. “For many of my clients,” Rueschemeyer explains, “Social Security turns out to be their single largest asset. When you run the numbers, a 55-year-old with a strong earnings history might have a present value of future Social Security benefits worth $400,000 or more. That’s not something you can afford to leave out of the conversation.”
A Common Scenario: The Teacher and the Private-Sector Spouse
Consider a Massachusetts couple divorcing at age 55. The wife is a public school teacher enrolled in the Massachusetts Teachers’ Retirement System (MTRS). The husband spent his career in the private sector and paid into Social Security throughout. Under current practice, the couple might divide the wife’s MTRS pension using a Domestic Relations Order, giving the husband a share of her future pension payments. But because Social Security cannot be divided, the husband’s future Social Security benefits are often ignored entirely—even though his projected Social Security may be worth as much as or more than the wife’s pension. The wife ends up sharing her pension while the husband keeps his Social Security, resulting in a settlement that is far from equitable. Understanding the value of future Social Security benefits allows the couple to see this imbalance and negotiate a fairer outcome.
Why This Matters Even More in Gray Divorce
The financial stakes of Social Security are highest for couples divorcing later in life. Research by Lin and Brown found that women’s household income drops by approximately 45 percent following a gray divorce, compared with about 21 percent for men (4). Part of this disparity stems from differences in Social Security: gray divorced women are nearly twice as likely to live in poverty as gray widowed women, in part because divorced-spouse benefits are capped at 50 percent of an ex-spouse’s benefit, while widow benefits can equal 100 percent (5). The authors concluded that Social Security is less effective at lifting divorced women out of poverty than widowed women, making it all the more important that divorcing couples account for Social Security disparities in their settlement negotiations.
What a Fair Settlement Looks Like
Accounting for Social Security does not mean one spouse writes a check to the other. Instead, it means adjusting the division of other assets to compensate for the Social Security gap. If the husband’s Social Security has a present value $150,000 higher than the wife’s, the wife might receive a larger share of the house equity, or a greater portion of the retirement accounts, to offset that difference. The goal is a settlement where both spouses walk away with roughly equal total wealth—including the present value of future Social Security benefits. This approach is especially well suited to divorce mediation, where couples have the flexibility to craft creative, individualized solutions rather than relying on a court’s one-size-fits-all order.
Taking the Next Step
If you are considering divorce, take the time to understand your Social Security picture before you finalize any agreement. Request your Social Security statement, calculate your projected benefits, and work with a mediator or financial advisor who understands how to factor Social Security into property division. For a primer on the eligibility rules that determine what you can claim after divorce, see our companion article on Social Security benefits after divorce. For a detailed walkthrough of how to calculate the present value of your benefits, visit the Social Security present value calculator guide on AmherstDivorce.com.
References
- Mahoney v. Mahoney, 425 Mass. 441, 446–447 (1997).
- Couch, K. A., Tamborini, C. R., Reznik, G. L., & Phillips, J. W. (2013). Divorce, women’s earnings, and retirement over the life course. In K. Couch, M. Daly, & J. Zissimopoulos (Eds.), Lifecycle Events and Their Consequences: Job Loss, Family Change, and Declines in Health (pp. 133–157). Stanford University Press.
- Butrica, B. A., & Smith, K. E. (2012). The retirement prospects of divorced women. Social Security Bulletin, 72(1), 11–22.
- Lin, I-F., & Brown, S. L. (2021). The economic consequences of gray divorce for women and men. The Journals of Gerontology: Series B, 76(10), 2073–2085.
- Lin, I-F., Brown, S. L., & Hammersmith, A. M. (2017). Marital biography, Social Security receipt, and poverty. Research on Aging, 39(1), 86–110.
