In New Jersey, retirement has always been viewed as a substantial change in circumstances warranting a review of whether alimony should be modified or terminated. In August 2014 Governor Christie signed into law changes in how retirement affects alimony. The new law provides that there is a rebuttable presumption that alimony terminates when the supporting spouse reaches full retirement age. Full retirement age is defined as the age at which a person is eligible to receive full social security retirement benefits. By setting the fixed social security retirement age as a trigger date for a review of alimony (if the supporting spouse actually retires) the courts are taking the controversy out of the question – “what is a good faith retirement date?” Prior to the enactment of the law a supported spouse could question whether a supporting spouse was retiring in good faith, even if the supporting spouse had passed normal retirement age.
Factors for the Court to Consider in Determining Whether to Terminate Alimony upon Retirement
There are a number of factors that the court must consider in deciding whether to terminate alimony upon retirement. These factors include: (1) the ages of the parties when the supporting spouse is retiring; (2) how old the parties were when they married and when alimony was first awarded. Other factors that the court must consider include: (3) the degree of the supported spouses economic dependency on the supporting spouse while they were married; (4) what the supported spouse gave up, if anything, in exchange for a larger or longer alimony award; (5) how much alimony has already been paid and for what period of time; (6) the health status of both parties at the time that the retirement application is put before the court; (7) the parties assets at the time that the application for termination of alimony is put before the court; (8) both parties incomes; and (9) whether the supported spouse had the ability to save for his or her own retirement.
Retirement Prior to Attaining Social Security Retirement Age
If you ask the court to terminate alimony prior to attaining your full social security retirement age there are a number of factors that the court will analyze before deciding whether you can retire at the “early” date that you would prefer and have your alimony payments cease. The court must first determine whether the early retirement is reasonable and made in good faith. To make that determination the court will analyze: (1) the age and health of the parties; (2) the supporting spouse’s field of employment and the generally accepted retirement age for persons in that field; (3) eligibility dates for retirement at the supporting spouses place of employment, including mandatory retirement dates and the dates, if any, when continuing to work will not increase retirement benefits; (4) the supporting spouse’s motives in retiring, including an analysis of whether there is pressure to retire and any incentive plans offered by the supporting spouse’s employer; (5) each party’s reasonable expectations regarding retirement dates during the marriage, and at the time of the dissolution of the marriage; (6) the ability of the supporting spouse to maintain support payments following retirement, including analysis of whether the supporting spouse continued work part-time or work reduced hours in retirement; (7) the supported spouse’s level of financial independence and the financial impact of the supporting spouse’s retirement on the supported spouse; (8) any other factors deemed relevant regarding the supporting spouse’s decision to retire and each parties financial position at the time of retirement.
Applicability of the New Retirement Law to Previously Decided Cases
It should be noted that the new retirement/alimony laws apply to previously decided cases. So if you have an alimony order which predates the recent changes your application to cease paying alimony upon retirement will be analyzed using factors set forth in the new law. It should also be noted that in all cases brought before the court to review alimony, and to determine specifically whether the supporting spouse has the continuing ability to pay alimony following retirement the court cannot consider income to the supporting spouse from assets distributed between the parties at time of the entry of the divorce.
If you have any questions about how retirement will affect your receipt or payment of alimony don’t hesitate to contact me at 201-731-3086 (toll-free at 844-431-3380), or email me using the contact form. For over 20 years my law practice has represented clients in divorce and family law related matters, primarily in northern New Jersey, including Bergen, Hudson, Essex, Passaic, Middlesex and Union counties. Whether you reach out to me by email or telephone your initial consultation is free of charge.