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Alimony and Retirement

Fotolia_79361597_M-768x513.jpgIn 2014, New Jersey amended its alimony statute to allow a party to modify or terminate his or her spousal support obligation based on actual or "prospective" retirement. N.J.S.A. 2A:34-23(j)(1-3). Under the recently amended statute, a spouse wishing to retire prior to reaching full retirement age (when a person is eligible to receive Social Security) must demonstrate, by a preponderance of the evidence, that the prospective retirement is both reasonable and made in good faith.

Mr. and Mrs. Mueller were married in 1986 and divorced in 2006. The parties entered into a settlement agreement whereby Mr. Mueller agreed to pay Mrs. Mueller $300 per week in permanent alimony. The agreement did not contain a provision addressing retirement, however. Consequently, Mr. Mueller filed a post-judgment motion regarding his alimony obligation under New Jersey's recently amended statute. Specifically, Mr. Mueller maintained that because he was 57 years old and would be entitled to his company's full employment-related pension benefit when he was 62 years old, he should be permitted to terminate his alimony payments in five years. Mr. Mueller further asserted that if he was not permitted to terminate his alimony payments, he would not be able to retire as planned.

The Superior Court of New Jersey in Ocean County held that Mr. Mueller's request for a prospective early retirement under the statute was premature; Mr. Mueller's full retirement age for receipt of his Social Security benefits was 66 years and eight months-nearly five years after he would be eligible for his work-related pension. Therefore, while the amended statute does not create an absolute minimum or maximum statutory time period when such applications would be appropriate, the Court reasoned that a retirement application submitted five years prior to the prospective retirement would require too much speculation as the parties' financial situations and health could drastically change over such a lengthy period of time.

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