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Are Saving Rates Used in Rewarding Alimony?
Jan L. Warner & Jan Collins

Question: My wife and I are getting divorced after 17 years of marriage because of my relationship with a woman at work. We have two children, 14 and 8, who will need to be educated. I have a master’s degree, and my wife is a teacher who has worked for most of our marriage. We are both 44 years of age and in good health.

I have to admit that my wife has been very frugal and has systematically saved nearly 20 percent of our income each year, in addition to our retirement savings. Because of her thriftiness, our only debt is the mortgage on our home. She earns about half of what I do, and I am prepared to pay her alimony. But she wants an amount added to her alimony that will increase my monthly payments to her so that she can continue to save, because this was included in our standard of living while we were together.

Being honest, I recognize that she will never earn as much as I do, and she will have less retirement savings. Adding an amount that will allow her to save, however, does not seem fair to me, especially since I will be starting a new family. My lawyer tells me our state has not addressed this question, and I don’t want to be the guinea pig.

Answer: While the basic purpose of alimony is to provide for the needs and necessities of life for a former spouse that were established during the marriage, the criteria often used to establish economic need vary from state to state. Generally, courts take into consideration the relative earning capacities, ages, health, education, length of marriage, standard of living during the marriage, and the value of the equitable division award to each. Some courts have considered the “savings component” as a factor in establishing alimony, while others have not.

Those courts that haven’t allowed the savings component reason that the amount of alimony needed is reflected by the family’s history of consumption, not accumulation of assets. Those courts that have allowed it use the rationale that an established pattern of contributing to a retirement or savings plan may be considered in determining the parties' accustomed standard of living.

Either way, we believe that women are going to face far greater challenges during retirement than men due to females’ longer life expectancy, lower lifetime earnings, and smaller pensions and other assets. According to a Social Security Administration report, elderly unmarried women – including widows -- receive 51 percent of their total income from Social Security, while elderly men receive only 39 percent. Social Security is the only source of income for 25 percent of unmarried elderly women. This, in turn, means higher rates of poverty for women than men.

Based on these governmental reports and statistics, we believe that financial planning components will be used more frequently in divorce planning and matrimonial litigation to sway judges to look more favorably at "savings components" as a legitimate factor in determining alimony in appropriate cases.

SoloFact: Women constitute 58 percent of all Social Security beneficiaries aged 82 and older, and 71 percent of beneficiaries aged 85 and older. As of 2002, women’s monthly benefits were $774, compared to $1,008 for men. More information about these important issues can be found at or click here.

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