How Does Retirement Impact Alimony in a Long-Term Marriage?
A frequent question that is asked in my divorce consultations where alimony is involved is either how long will I receive alimony or how long will I pay alimony. This becomes even more of a consideration where the parties have been in a long-term marriage but are nearing or are at retirement age. Since the 2014 amendment to the New Jersey alimony statute, New Jersey has established a brightline rule that 20 years of marriage (or more) creates an entitlement to open durational alimony (alimony that is paid until the presumptive retirement age of the obligor), while at the same time indicating that presumptive retirement is tied to social security retirement (which for most people is age 67).
The amended alimony statute creates a rebuttable presumption that alimony terminates upon the obligor spouse or partner attaining that full retirement age. Specifically, N.J.S.A. 2A:34-23 provides:
Alimony may be modified or terminated upon the prospective or actual retirement of the obligor.
(1) There shall be a rebuttable presumption that alimony shall terminate upon the obligor spouse or partner attaining full retirement age, except that any arrearages that have accrued prior to the termination date shall not be vacated or annulled. The court may set a different alimony termination date for good cause shown based on specific written findings of fact and conclusions of law.
The rebuttable presumption may be overcome if, upon consideration of the following factors and for good cause shown, the court determines that alimony should continue:
(a) The ages of the parties at the time of the application for retirement;
(b) 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;
(c) The degree and duration of the economic dependency of the recipient upon the payor during the marriage or civil union;
(d) Whether the recipient has foregone or relinquished or otherwise sacrificed claims, rights or property in exchange for a more substantial or longer alimony award;
(e) The duration or amount of alimony already paid;
(f) The health of the parties at the time of the retirement application;
(g) Assets of the parties at the time of the retirement application;
(h) Whether the recipient has reached full retirement age as defined in this section;
(i) Sources of income, both earned and unearned, of the parties;
(j) The ability of the recipient to have saved adequately for retirement; and
(k) Any other factors that the court may deem relevant.
If the court determines, for good cause shown based on specific written findings of fact and conclusions of law, that the presumption has been overcome, then the court shall apply the alimony factors as set forth in subsection b. of this section to the parties’ current circumstances in order to determine whether modification or termination of alimony is appropriate. If the obligor intends to retire but has not yet retired, the court shall establish the conditions under which the modification or termination of alimony will be effective.
This interplay between alimony considerations in a long-term marriage and where a payor is closer to retirement age was recently addressed in an unreported (non-precedential) New Jersey Appellate Court opinion, Frey v. Frey. The Frey Court reversed the trial court’s award of a four-year term of alimony after a 29 year marriage where the payor was 62 years old. In this case, the New Jersey Appellate Division noted that the payor’s future retirement was “not a basis for awarding limited duration alimony in a long-term marriage.” The Appellate Court found that it was reversible error for the court to award limited durational alimony because a payor “may” seek to retire in the future.
This case interestingly differentiates between imminent retirement and one that is somewhere in the future. This provides somewhat of a roadmap for cases involving long-term marriages with older parties, in that a Court will not set a term of alimony that is less than open durational in a 20 year marriage absent evidence that retirement is imminent. Even in those cases, it could be considered an error on the Court’s part to create a limited duration term if the term is not tied to actual retirement after the obligor reaches full retirement age.
It is important in your divorce negotiations or litigation to make sure that you have adequately considered how retirement will affect how long you will receive alimony or how long you will pay alimony. For more information about how retirement may impact your alimony, contact our office to schedule a consultation with Georgia Fraser, Esq. an experienced and knowledgeable family law attorney. You may contact us online or call us at 609-223-2099.