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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 11-17-2016, 12:35 PM
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Default Spousal Support & Pension

Hi folks, new here and contemplating leaving a 20 yr marriage. I am 56, the main earner with a government pension plan and CPP credits. He is 54 and has been self employed most of his life, now minimally employed (mostly due to injury). I know my pension and CPP credits will be divided. From what I understand actual money will be taken out of my pension account and turned over to him to invest (or spend, or ...). I am assuming CPP credits will be transferred to his account. I know I will have to pay spousal support out of my income, probably forever. Oh well...

My question. If I retire from my current job, take a new job and start drawing my pension before we split what happens?
-Does my pension income get added to my job income and SS calculated from that total?
-Does the pension plan pay him out and SS get calculated from my new job income plus my half of the pension?
-Does the pension plan pay him out and SS get calculated only from my new job pension?
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Old 11-17-2016, 01:17 PM
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....he is 54 and you were together for 20yrs. He meets the "rule of 65", so you will indeed have to pay SS as the highest earner indefinitely.

Once a date of separation is established, this will be used as actuation, and whatever happens in your lives from that moment on doesn't become part of the immediate dealings.

SS will be calculated from notice of assessment (NOA) for the last 3 years. So, if you go take a low paying job in order to avoid paying, it's more likely to backfire.

Your stbx will get the pension split when they become entitled to draw it. SS is calculated from your earnings only
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Old 11-17-2016, 02:10 PM
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Hi Hopefull. I am not looking at getting a lower paying job to avoid paying. I am looking for around the same pay so I can have an ok standard of living even with paying SS.

If I left my current job for a new one today I would start drawing my pension and earning a salary giving me a hypothetical income of $100K/year. Let's say we separate on 1 June 2017.

My SS would be calculated on the 3 previous years earnings. Got that, thank you.

If I did not change jobs my income would just be my earnings and my pension would be subject to splitting as an asset.

My question is, if I change jobs what about my job pension? I will have already been drawing it for 6 months prior to separation. What part of it, if any, would he be entitled to and how would it be paid to him?
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Old 11-17-2016, 02:54 PM
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When a federal pension is divided, your ex's half would be put into a locked-in RRSP type investment, which he could not access until retirement. So he won't get a giant lump sum to do whatever he wants with. He's going to be guaranteed to have it for retirement income.

SS is whatever you agree to it being. SS has lots of flexibility that way. That's the main reason people don't agree and end up arguing about it in court. It's all about what you and your lawyer argue, what your ex and his lawyer argue, and what the judge you happen to get thinks of SS.

You could end up having to pay a set amount of SS for the rest of your life, no matter what funds or income you draw it from. You could end up paying no SS (unlikely). You could end up paying SS until your reasonably foreseen retirement (age 65), after which you are both expected to draw on your own retirement funds. Then it would be up to you if you wanted to retire earlier or later.

Also, as far as I understand things, SS is calculated based on current income, ie, your last pay stub if you are a salaried employee. Averaging back 3 years is usually done when someone is self-employed and income fluctuates.

So am I correctly interpreting that you are trying to gather information to determine if you should stay married or not? Or are you intending to separate already and trying to decide if an imminent job opportunity is worth retiring early for? The big question is, how reasonable would your husband be about any of this, if you split up? Is his injury truly a disability, for example?
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Old 11-17-2016, 03:49 PM
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Rioe: I will have to retire from my current job in 3 years anyway so I am looking for something else now. I would be doing this regardless of the home situation.

Our marriage is getting to the point were we are civil to each other but that is about it. I don't want to go into details here, but right now I don't want to spend the rest of my life with him. I think he is oblivious to how I feel, how much I have researched and planned for leaving him. When I tell him, it will hit him like a ton of bricks, so I have to be careful. When I leave, I need to have all my ducks lined up and a plan in place because things could get ugly. He has said in the past that if I ever left him he "would take me to the cleaners" and I would be living in a shack on KD. So no I do not think he will be reasonable. Once he gets over the shock, I anticipate that he will become vindictive and go out of his way to show how he has supported me all these years, given up for me, etc... now he is the victim. I think he will milk his injury, aches and pains for every cent he can.

Part of my planning is trying to figure out how money much I will have to pay and how much of the joint assets (which is pretty much everything we own) and income I will be left with.
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