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Early retirement’s impact on divorce

Q: My husband recently retired at the age of 60. He has no 401(k), no pension or other savings to speak of. He will get Social Security, although only minimal since he’s taking early retirement. We’re divorcing, we own a home with no mortgage and the kids are grown and gone. I still work and earn a good salary. After splitting the house, I thought we’d be done but he wants me to pay alimony. Can I be forced to pay him alimony when it was his choice to retire with nothing put away? He also wants half of my two pensions when I retire in the next 10 years. Do you think this is something we need an attorney for or is arbitration the way to go? A: While you can certainly opt into binding arbitration, which is essentially like hiring a private judge to hear your case and make a decision, generally people who arbitrate hire lawyers to represent them during the process. Oftentimes people mix up arbitration and mediation. You can certainly try mediation in the first instance, which people often do without attorneys. If you go that route, you need to find a reputable family law attorney who also does mediation given the issues at stake. Mediators are neutral but can tell you generally how things are typically resolved. I have good news and bad news for you. Starting with the good news, unless you made significantly more than your husband during the marriage, you probably won’t have to pay him alimony. He was capable of continuing to earn a living but chose not to at an age that is well before the normal retirement age as defined by Social Security. He cannot lay his bad decisions at your doorstep. A judge or even an arbitrator can attribute income to him at the level he was earning before retirement. So, for example, if he made $80,000 and you made $100,000, you could be ordered to pay alimony on the difference in your respective incomes provided he can prove a need, until you reach normal retirement age. In this example, he could get up to 27% of $20,000 per year. But, if he is able to live on his $80,000, he would not get alimony. This is something that he could learn in mediation, but would surely be told to him by a family law attorney if he consults one. The bad news is he is entitled to half of your pensions when you retire. The pensions will be divided now by a Qualified Domestic Relations Order, which will essentially instruct the administrator of your retirement plan to set aside his portion and pay it out to him when you retire. The good news is if you plan to keep working another 10 years, he will not get any portion of what you pay in or accumulate post-divorce. So, find a way to get to yes sooner rather than later — your contribution clock is ticking. Email questions to whickey@brickjones.com.

Early retirement’s impact on divorce
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Published by Chizzyterem

A gentle polite boy

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