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What Happens to Alimony When the Paying Spouse Retires?

Aug 30, 2016 | Written by: William W. Goodwin, Jr., Esq. |

One of the fundamental tenets of New Jersey Family Law is that alimony payments are subject to modification based upon "changed circumstances." That alimony may change from time to time is provided for in our statute. The "changed circumstances" standard first arose and has since evolved over many years through our case law.  Generally speaking, to be impactful, such changes are expected to be permanent, or at least long-term, and not within the direct control of the paying spouse.  For example, a paying spouse who quits his job is highly unlikely to obtain any relief, while one who becomes disabled from working is almost certainly entitled to a modification of his obligation.

While the types of circumstances that may give rise to a modification of alimony are almost limitless, there are certain events that occur with some frequency, one of which is the retirement from gainful employment of the paying spouse.  This article will address that circumstance and comment on the impact that the recently amended (September 2014) alimony statute and very recent case law interpreting that amendment have had on the issue.

Prior to the 2014 statutory amendments, retirement was not specifically mentioned in the statute.  However, it was the topic of many reported decisions. At the risk of over-generalizing, because each case is decided on its own merits, the cases tended to create a dichotomy between those payors who retired at or after a "normal retirement age" (generally thought to be age 65 for a typical employee) and those who sought to retire early. Not surprisingly, it was much easier, although certainly not guaranteed, for a person who waited until "normal" retirement age to obtain a reduction or even a termination of alimony.  That distinction appears to have survived the 2014 statutory amendments.

The new statute creates a bright-line distinction between those cases where an alimony obligation had already been established when the new statute took effect, and those where the obligation did not commence until after the statute became effective.  In the former case, a retirement at "full retirement age" is considered to have been done in good faith but the burden of proof to modify or terminate alimony remains with the paying spouse.  In those cases, the Court has to review the financial records of both parties and then weigh a number of equitable factors such as the age and health of both parties, the paying spouse's field of employment, his ability to continue to pay alimony after retirement from other sources, and the ability of the other spouse to have saved for her retirement since the time of the divorce.

In the latter case, a retirement after reaching "full retirement age" is not only deemed to be in good faith, but also creates a presumption that alimony should terminate, thereby shifting the burden of proof to other spouse to prove why she should continue to receive alimony post-retirement.  The term "full retirement age" is defined as the age at which full Social Security benefits are available, generally age 66 or 67, depending upon one's year of birth.

One innovation presented by the new statute is the opportunity to file an application to modify or terminate alimony based upon the paying spouse's "prospective retirement."  In other words, a party may now file an application even though he has not yet retired. The purpose of this section of the statute is to avoid the "Catch-22" dilemma where one has to retire before knowing whether and to what extent his alimony obligation will change as a consequence of that action.

A recent reported trial court decision analyzed this section and made several points.  First, the application must be made when the retirement is anticipated to occur in the near future. In that case, a 57 year-old man was rebuffed when he applied to terminate his alimony at age 62.  Five years out was simply too long a horizon.  The Judge hinted that a period of 12-18 months might not be considered premature and, therefore, would be sufficient in the typical case.

Second, the person filing the application would have to provide updated financial documentation and a specific and detailed plan as to when he intends to retire, how much alimony (if any) he would expect to continue to pay after retirement, and details around how he would be able to support himself post-retirement.

Finally, in any case, the modification of alimony would not occur until the paying spouse actually retired.

It is critical to understand that no two cases are exactly the same.  These statutory provisions and the case law interpreting and applying them are guideposts, and the results in any given case will be determined more by the facts and how they are gathered and presented by legal counsel, than by the law.

If you have questions about your alimony rights or obligations, whether due to a recent or prospective retirement, or for any other reason, please feel free to call upon us.


William W. Goodwin, Jr., Esq. is certified by the NJ Supreme Court as a Matrimonial Attorney. He is also qualified as a Mediator in the field of Family Law under the New Jersey Court rules, and he is trained in Collaborative Divorce. Contact Mr. Goodwin at 908-735-5161 or via email.