Tell-Take Signs of Divorce

Couples in their 50s and older are making up an increasingly large percentage of divorces. For many, retirement is not far in the future. If an alimony (spousal support) agreement has been reached in the divorce, how is that settlement impacted by retirement?

Alimony payments can be renegotiated if there is a significant change to either the payer's or receiver's financial circumstances. For a payer, this could include a job loss, a significant drop in income or retirement. The same is true for the person who's receiving alimony. In addition, if that person remarries, he or she is no longer entitled to alimony.

These days, alimony is no longer always a permanent arrangement. It's often intended to provide support to a spouse who needs time to get education or training to find employment that will allow him or her to become self-supporting. However, many older divorcing spouses (particularly women) may have been out of the full-time workforce for so long that they will require long-term support.

What Happens When the Payer Retires?

When a person who's paying alimony retires, his or her income will likely drop significantly. However, that doesn't mean an automatic reduction or termination of alimony obligations. It depends, in part, on the circumstances of the retirement.

For example, if a man decides to retire at 55 so that he can spend more time golfing, a court would likely consider this a voluntary retirement, assuming that he was able to continue working if he chose. However, if he has a medical issue that makes retirement a wise choice for his health or if he works until what a court considers a reasonable time to retire, he's more likely to be granted a reduction in payments.

Payments will be recalculated based on the payer's new income level. This includes any Social Security and other benefits that person is receiving.

Are Support Payments Impacted When the Recipient Retires?

Alimony is also based on the recipient's assets and income level. If a person receiving alimony retires, he or she may be able to ask for more support. Again, it will depend on the reasonableness of the retirement as well as that person's new income level. People are not only eligible for Social Security benefits based on their work history, but for spousal benefits if they meet the Social Security Administration's (SSA) requirements. Spousal benefits are a potential source of income.

If may be prudent to discuss retirement plans during your spousal support negotiations. If you're already divorced and considering retirement, it's wise to talk with your divorce attorney in order to get some guidance on how this may impact your spousal support agreement.