The Law Office of Matthew B. Lun, Esq. represents clients across New Jersey seeking to terminate or modify alimony upon retirement, as well as those responding to a retirement application.
Retirement and Alimony in New Jersey
Retirement is one of the most common reasons a paying spouse seeks to end or reduce alimony. Before 2014, New Jersey courts addressed retirement applications using the general “changed circumstances” standard established in Lepis v. Lepis, 83 N.J. 139 (1980). On September 10, 2014, the Legislature amended the alimony statute, adding specific rules for retirement at N.J.S.A. 2A:34-23(j).
Importantly, the amended statute distinguishes between alimony obligations established before September 10, 2014, and alimony obligations established on or after that date. Which rule applies depends on when the final alimony order or written agreement was entered, not on when the retirement application is filed. As the Appellate Division explained in Landers v. Landers, 444 N.J. Super. 315 (App. Div. 2016), subsection (j) distinguishes alimony orders executed prior to the amendment’s effective date from those executed afterwards.
Under the statute, “full retirement age” means the age at which a person is eligible to receive full retirement benefits under the federal Social Security Act — currently age 67 for most people.
Orders and Agreements Entered On or After September 10, 2014
For alimony established on or after September 10, 2014, N.J.S.A. 2A:34-23(j)(1) creates a rebuttable presumption that alimony will terminate when the paying spouse reaches full retirement age. The burden then shifts to the recipient to show why alimony should continue. The court may also set a different termination date for good cause.
In deciding whether the presumption has been overcome, the court considers a number of statutory factors, including:
- the ages of the parties when the application is made, and when they married or when alimony was awarded;
- the degree and duration of the recipient’s economic dependency during the marriage;
- whether the recipient gave up or delayed a career to support the paying spouse’s career;
- the duration and amount of alimony already paid;
- the health of the parties;
- the parties’ assets, including retirement benefits and property received in equitable distribution;
- whether the recipient has reached full retirement age;
- the parties’ sources of earned and unearned income; and
- the recipient’s ability to have saved adequately for retirement.
Any alimony arrears that accrued before the termination date are not erased.
Orders and Agreements Entered Before September 10, 2014
For alimony established before September 10, 2014, a different rule applies under N.J.S.A. 2A:34-23(j)(3). There is no presumption that alimony terminates at retirement. Instead, reaching full retirement age is deemed a good faith retirement age, and the paying spouse bears the burden of demonstrating that modification or termination of alimony is appropriate.
The court weighs factors such as the parties’ ages and health, each party’s ability to maintain support payments after retirement, the paying spouse’s employment history and earning ability, whether the parties’ agreement or judgment contemplated retirement, the recipient’s level of financial independence and any efforts to save for retirement, and any other relevant factors. As the court in Landers noted, subsection (j)(3) follows the prior principles of Lepis rather than creating a presumption of termination.
Because the burden of proof is reversed depending on the date of the order or agreement, identifying the correct subsection is often the most important first step in any retirement application.
Retiring Before Full Retirement Age
A paying spouse who seeks to retire before reaching full retirement age may also apply to modify or terminate alimony under N.J.S.A. 2A:34-23(j)(2). In that situation there is no presumption in the paying spouse’s favor. The paying spouse must show that the early retirement is reasonable and made in good faith, and the court will consider factors such as the parties’ ages and health, the reasons for retirement, any pressure or incentives from an employer, and the effect on the recipient.
Prospective Retirement and Settlement Agreements
A party does not always have to wait until after retirement to seek relief. The court may address a prospective retirement and establish the conditions under which a modification or termination will take effect. In addition, many Marital Settlement Agreements include specific retirement provisions, which can control the outcome. Reviewing the exact language of your agreement or judgment is essential.
Qualified Legal Representation
Retirement applications require careful analysis of the governing subsection, the parties’ finances, and the terms of any agreement. Whether you are planning to retire or are responding to a retirement application, the Law Office of Matthew B. Lun, Esq. can help you understand your rights and present your case effectively. Contact us at 609-964-0900 for a consultation.
Not every retirement issue has to be decided by a judge. Former spouses can often negotiate the timing and effect of a retirement on alimony through mediation. Learn more about alimony mediation in New Jersey.