Retirement And Alimony

In New Jersey, an alimony obligation is modifiable based upon a showing that a substantial change in circumstances has occurred since the time of the divorce. Examples of a “change in circumstance” that may warrant a modification of an alimony obligation include an increase or an involuntary decrease in either party’s income/finances, cohabitation of the alimony recipient tantamount to remarriage, involuntary loss of employment, and good faith retirement of the payor.

The termination of the payor’s alimony obligation occasioned upon a payor’s retirement is not automatic. It is up to the payor to file an application with the Court to modify and/or terminate their alimony obligation due to their retirement. In determining whether a payor’s impending retirement constitutes a substantial change in circumstances warranting a modification and/or termination, the Court will consider (1) the age and health of the parties seeking to retire, and (2) the motive and timing of the impending retirement. The Court will also look at the payor’s ability to pay alimony after retirement, as well as the recipient spouse’s ability to provide for themselves. This involves an examination of both parties’ incomes and assets.

In the event the Court determines that the reason for retirement is to avoid their alimony obligation, the payor’s application will be denied. In the event that the Court finds that the payor’s retirement is in good faith, the Court must then determine whether the advantage of the retirement to the retiring spouse outweighs the disadvantage to the recipient. This determination is critical to the analysis. In the event that the Court determines that the advantage to the payor in retiring does not “substantially outweigh” the disadvantage to the recipient, then the payor’s retirement, even though pursued in good faith, will not be a basis to modify their alimony obligation. This is a fact sensitive inquiry that the Court determines on a case-by-case basis.