You are divorced. You have paid alimony faithfully for years. You were never late. You never missed a payment.
Now you have reached retirement age, and you would like to retire.
There is just one problem... There is no practical way for you to stop working and continue paying the same amount of alimony.
So, can you retire and stop paying alimony in New Jersey?
Maybe. But you cannot simply retire and stop sending payments.
No. Alimony does not automatically end when you retire.
New Jersey law allows an alimony obligation to be modified or terminated based on the prospective or actual retirement of the person paying alimony.
But unless your former spouse agrees to a change and that change is properly formalized, you generally need to apply to the Family Court and ask a judge to modify or terminate your alimony obligation.
Until the court changes your obligation, the existing order remains in effect.
That means you should not simply stop paying alimony when you retire.
Doing so can result in arrears, enforcement proceedings, additional legal fees, and a much bigger problem than you started with.
Under New Jersey's alimony law, "full retirement age" generally means the age when you are eligible to receive full Social Security retirement benefits.
For many people approaching retirement today, that age is 67. Your exact full retirement age depends on the year you were born.
This is different from the age when you can first begin collecting reduced Social Security retirement benefits.
That distinction matters when asking a New Jersey court to terminate or modify alimony based on retirement.
This is extremely important.
New Jersey substantially changed its alimony law effective September 10, 2014.
The rules that apply to your retirement may depend on whether your alimony order or enforceable agreement was established before or after the 2014 changes.
If your alimony order was entered after the 2014 law took effect, there is generally a rebuttable presumption that alimony should terminate when the paying spouse reaches full retirement age.
That's a good starting point.
But it is not a guarantee.
"Rebuttable" means your former spouse can present evidence to the court showing why alimony should continue.
The judge will then consider the circumstances of both former spouses before deciding whether alimony should terminate, continue, or be modified.
If your alimony obligation was established before the 2014 amendments took effect, the analysis is different.
You generally do not receive the same statutory presumption that alimony terminates at full retirement age.
Does that mean you have to pay alimony forever?
No.
Reaching full retirement age is still significant, and the court can consider retirement as a basis for modifying or terminating your alimony obligation.
But the court applies a different section of New Jersey's alimony statute and considers several factors before deciding whether modification or termination is appropriate.
The expectations you and your former spouse had when you divorced can also become particularly important.
There is no simple alimony retirement calculator that tells you whether your payments will end.
Depending on which section of New Jersey's alimony law applies to your case, the court may consider factors including:
In other words, the judge isn't simply asking:
"Are you old enough to retire?"
The court has to look at the financial circumstances surrounding your retirement and the effect that changing or terminating alimony would have on both of you.
Early retirement can make things more complicated.
If you want to retire before reaching full retirement age, you may have a greater burden to show the court why your retirement is reasonable and made in good faith.
Depending on the law applicable to your alimony order, the court may consider things such as:
What the judge does not want to see is someone retiring early simply to avoid paying alimony.
You are allowed to want to retire.
But choosing to retire early does not automatically mean your former spouse must absorb the resulting financial loss.
Potentially, yes.
New Jersey law recognizes prospective retirement. In appropriate circumstances, you may be able to ask the court to address your alimony obligation before your planned retirement actually occurs.
That can be extremely important.
You do not necessarily want to leave your job, lose your employment income, and only then begin figuring out whether your alimony obligation will change.
A specific, realistic retirement plan is much stronger than telling a judge that you may retire sometime in the future.
Retirement cases are heavily dependent on financial evidence.
Depending on your circumstances, your attorney may need to review or present:
And do not overlook your original divorce agreement.
The language in that agreement can be extremely important.
Before filing anything, your attorney should carefully review what your agreement says about retirement, modification, termination of alimony, and the expectations you and your former spouse had when the agreement was signed.
Don't.
Unless your obligation has legally ended, your existing alimony order remains enforceable.
Simply deciding that you are retired and therefore no longer have to pay can result in unpaid alimony accumulating as arrears.
Instead, address the issue before you stop making payments.
The goal should be to have the retirement and alimony issue properly resolved, not to create an enforcement case on top of it.
Yes.
Termination is not necessarily the only possible outcome.
Depending on the facts of your case, a court may determine that modifying your alimony obligation is more appropriate than eliminating it completely.
Your post-retirement income, your former spouse's financial circumstances, the existing alimony agreement, and the law applicable to your case can all affect the result.
That is why two people who retire at exactly the same age can have very different outcomes.
Retirement can provide a valid basis for reducing or terminating alimony in New Jersey. But retirement alone does not automatically stop your payments.
Your outcome may depend on:
If you remember only one thing from this article, remember this:
Do not stop paying alimony simply because you retired.
Handle the issue before the arrears start accumulating.
If you are approaching retirement and still paying alimony, understanding your options before you leave your job can save you a tremendous amount of aggravation later.
My free Divorce Smarter Course can also help you better understand New Jersey alimony, retirement, and the financial decisions that may affect your future.
Until next time,
Steve