When a couple divorces, one spouse may be ordered to pay alimony, also called spousal support, to the other. If you are making alimony payments, you may be wondering how your retirement will affect your alimony payments. Unfortunately, there is no easy answer, and retirement does not bring an automatic end to an alimony obligation.
New Jersey law provides that alimony may be modified or terminated based on a substantial change in circumstances. Retirement may be considered a substantial change in circumstances that warrants a review of alimony but not necessarily a modification or termination. Whether or not the payor is entitled to a termination or modification will depend on a number of factors, including the specific terms of the divorce settlement agreement or court order that establish the alimony payments and your age when you retire.
Pursuant to the Social Security Act, the presumptive full retirement age is currently 67 years old. Under New Jersey law if you retire or intend to retire at 67 years old there is a rebuttable presumption that the obligation to pay will terminate or be modified. If you are the payor of alimony and choose to retire before 67 years you must be able to show that the retirement was reasonable and made in good faith.
Additionally, the court will consider the following factors when determining if alimony should be modified or terminated based on the payor’s retirement: the age of the parties when married and when alimony was first awarded; the financial dependency of the recipient upon the paying spouse; how much and how long alimony has been paid; whether the person receiving alimony gave up other rights during the divorce for a higher/longer alimony payments; the health of the parties; assets of each party and all sources of income; whether the parties are at full retirement age; and the recipient’s ability to save.
If you are paying alimony and want to retire, or if you receive alimony and your ex-spouse is considering retirement, it is important that you consult with an experienced family law attorney first to protect your financial rights. Our Family Law Attorneys at Cohn Lifland Pearlman Herrmann & Knopf LLP can help answer your questions.