Retirement and Alimony in New Jersey
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If you have a marital settlement agreement requiring alimony payments in New Jersey, or if the court ordered alimony in your New Jersey divorce case, the court has the power to order changes to the payments under certain conditions.
Unless the alimony order or your agreement provided that neither spouse could request a modification (change), the court can alter the payment amount or end the payments entirely if circumstances change considerably after the initial award. A decrease in the income of a paying spouse due to uncontrollable factors, such as job loss, can ordinarily be the basis for a modification. Whether or not retirement calls for a decrease will depend on all of the circumstances in your case.
Normal Retirement Age
A paying spouse who has reached a normal retirement age (generally considered to be approximately 65, or the eligibility age for social security retirement benefits) is entitled to a court hearing to determine whether the retirement has resulted in changed circumstances calling for a reduction in alimony payments to the supported spouse.
The court will look at whether the retirement was reasonable under all the circumstances of the particular case or whether it was motivated primarily by a desire to reduce alimony. A court can consider any relevant factors, including:
- the ages and health of both spouses
- the retiring spouse’s occupation
- whether the retirement was mandatory or voluntary
- whether the retirement happened earlier than was expected at the time of the initial alimony order or agreement, and
- the impact of the retirement on the overall economic circumstances of each spouse.
When retirement occurs before the usual age of 65 or so, the court will look more closely at the reasons. In addition to considering the reasonableness of the retirement and the retiring spouse’s motivation, a New Jersey court will also balance the interests of the retiring spouse against the interests of the supported spouse.
A spouse who has good reasons for retiring early, such as a significant financial incentive, legitimate health concerns, or high physical demands of the former occupation, will not necessarily have to continue paying alimony at the pre-retirement level, especially where the effect of a reduction on the supported spouse would be minimal.
A spouse who simply desires an easier life, on the other hand, will not be permitted to reduce payments if the supported spouse would be left with a considerable shortfall in the ability to cover necessary expenses. In this situation, the court won’t order the paying spouse not to retire, but it also won’t relieve the spouse of the payment obligation.
Planning for Retirement
The best course of action is to address potential retirement before a divorce is final. A marital settlement agreement can and should take into account the paying spouse's probable age of retirement and ensure that a supported spouse is not taken by surprise with a sudden and unanticipated drop in income. While it may be difficult to plan for the effects of a future event, it will usually be even more difficult to go through a court proceeding to settle the matter later.
If your agreement or alimony award didn't take retirement into account, the next best course of action is to try to negotiate an acceptable solution, such as a gradual reduction in payments to allow the supported spouse time to adjust. If negotiations fail, the paying spouse will not ordinarily be able to request a reduction until after the actual retirement, as courts won’t order modifications based on future events. This can make the decision to retire risky. If you are the one who is planning to retire, try to assess the impact on both you and your former spouse before making any decisions that you may not be able to take back.
While there are no guarantees, you will generally have a much better chance of success with your motion if you have already reached social security retirement age or are retiring because you have no choice in the matter. If you aren’t certain what the result is likely to be in your particular case, contact an attorney for assistance.