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If a court has ordered alimony payments as part of your divorce, whether you're receiving or paying, you might be wondering how long that alimony will last. While court orders or alimony agreements usually provide a timeframe, conditions, or procedure for modification or termination, typically courts will allow modification for changed circumstances. Retirement will usually qualify as a changed circumstance worthy of a modification of the order if certain conditions are met.
Ending alimony payments, on the other hand, will generally only occur if financial or other circumstances have changed drastically, such as upon death (but even after death, in some cases, alimony can continue). Because alimony is generally viewed as a temporary support mechanism to allow a disadvantaged spouse to become self sufficient, ending alimony usually requires the supported spouse to no longer be in need. This can occur when they die, are no longer in need, become employed, remarried, or win the lottery.
When the Payer Retires
When the former spouse paying alimony retires, just like any other retiree, their income will likely be significantly reduced, depending on how their retirement is structured. Because alimony is generally decided based on the respective incomes of the parties, when an income changes involuntarily, that party is generally justified in requesting a reduction in their alimony obligation. Courts will normally look to the reasonableness of the changed circumstance. Among the most important factors a court will look to is whether the changed circumstance was voluntary or involuntary. For retirement to be considered involuntary, there must be a medical issue causing it, or the party must be able to show that it was a reasonable time to retire. Taking an early retirement may not be considered reasonable by the court, even if you were advised by your financial planner to do it.
Additionally, even if Social Security benefits are the only source of retirement income, they are not exempt from calculating alimony payments. However, former spouses may be able to claim spousal benefits through Social Security, which can reduce their needs for alimony.
When the Receiver Retires
If the spouse receiving alimony has been working and was still receiving alimony, they will still be able to receive alimony when they choose to retire. Additionally, if their income is significantly reduced by retirement, they may be able to seek an increase in alimony payments. Typically though, the court will assess the reasonableness of this request like they would for the payer requesting a reduction in their support obligation.
Laws regarding modification and termination of alimony vary from state to state. If you are considering retirement but are concerned about the alimony you receive or have to pay, you should contact an attorney in order to determine if you can potentially modify the alimony order or agreement.