How Alimony Payments Are Affected By Retirement

We all look forward to the day when we can retire.  We work hard with our family to build our financial future so we can spend our retirement devoting our time and energy to family and favorite hobbies.  However, when there has been a divorce, this results in new financial realities for both parties.  When one party is the economically disadvantaged spouse, he or she can request an award of alimony.  Alimony payments can constitute a large expense, and many wonder how alimony will be affected by retirement.

In New Jersey, alimony can only be changed when the requesting party can demonstrate that there has been a material change of circumstances since the last order was entered.  It is possible that retirement can be a change of circumstances adequate to reduce or even eliminate monthly alimony payments.  The court will review specific information to determine if the retirement of the paying spouse in the case constitutes a change of circumstances, such as medical records, the reason the paying party is retiring, and whether either party is able to continue working.  It is essential that the person seeking to reduce alimony can demonstrate that the retirement is being done in “good faith,” and not simply out of a desire to spite the other party.  This will often include providing paperwork to support the claim that the retirement is in good faith.

If a spouse decides to retire before the age of sixty-five, he or she will have a harder time convincing the court to reduce the alimony obligation.  In those cases, the court will only view the retirement as a change of circumstances to justify a modification if the advantage in retirement to the retiring spouse substantially outweighs the financial detriment that would be suffered by the receiving spouse if alimony were stopped or reduced.

If the paying spouse can prove there has been a change of circumstances, the court will then consider other factors when trying to decide whether a reduction is appropriate.  The court will look at such issues as the parties’ respective ages, the availability of pensions or retirement assets for each spouse, and the reasonableness of the decision to retire by the paying spouse.

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