NJ Divorce Law Questions: Can You Stop Paying Alimony when You Retire?

The NJ alimony statute, effective September 10, 2014, addresses the issue of termination of alimony in light of a payor’s retirement. The new NJ Alimony Reform Retirement allows a person to make an application based upon prospective retirement; whereas, the prior law required actual retirement. In addition, there is now a rebuttal presumption that alimony ends when the person who is paying alimony reaches retirement age. The presumption may be overcome upon consideration of the following factors and for good cause.

• The ages of the parties at the time of the application for retirement;
• The ages of the parties at the time of the marriage or civil union and their ages at the time of entry of the alimony award;
• The degree and duration of the economic dependency of the recipient upon the payor during the marriage or civil union;
• Whether the recipient has foregone, relinquished or otherwise sacrificed claims, rights or property in exchange for a more substantial or longer alimony award;
• The duration or amount of alimony already paid;
• The health of the parties at the time of the retirement application;
• The assets of the parties at the time of the retirement application;
• Whether the recipient has reached full retirement age as defined in this section;
• Sources of income, both earned and unearned, of the parties;
• The ability of the recipient to have saved adequately for retirement; and
• Any other factors that the court may deem relevant.

If the presumption is overcome, the court must apply the alimony factors to the parties’ current circumstances to determine modification or termination.

An obligor (the person who is paying alimony) who seeks to retire before attaining full retirement age has the burden of demonstrating by a preponderance of the evidence that the retirement is made in good faith.

The Court must consider the following factors to determine good faith:

• The age and health of the parties at the time of the application;
• The obligor’s field of work and the typical retirement age for those in that field;
• The age when the obligor is eligible for retirement at their workplace, including mandatory retirement dates or the dates when continued employment would no longer increase retirement benefits;
• The obligor’s motives in retiring, like pressure to retire or incentive plans offered by their employer;
• The expectations of the parties about retirement during the marriage or civil union and at the time of the divorce or dissolution;
• The ability of the obligor to maintain support payments after retirement, including whether they will work part-time;
• The obligee’s level of financial independence and the financial impact of the obligor’s retirement upon the obligee; and
• Any other relevant factors affecting the obligor’s decision to retire and the parties’ respective financial positions.

As you can see, the law has provided many things for the Court’s consideration, helping them come to as fair a decision as possible when it comes to retirement and alimony. Here at Gruber, Colabella, Thompson, Hiben & Montella, we work with fairness and your best interest in mind! Click here for a free consultation.