One divorce calculator shows that there could be less money to go around after the new tax rules go into effect — resulting in smaller alimony payments.
That is according to Analyze My Divorce Settlement, the latest tool from Boston University economics professor Laurence Kotlikoff’s company, Economic Security Planning.
“They do have to adjust the alimony amount in light of the change in the law,” Kotlikoff said. “It can be a dramatic adjustment.”
A hypothetical scenario run through the tool takes one couple who are both 50 and living in Colorado with no children. After splitting $1.5 million in savings and selling their house for $1 million, they both rent for $2,500 a month.
The goal of their divorce is to keep their living standard equal, according to Analyze My Divorce Settlement’s assumptions. So the husband making $500,000 will pay alimony payments to the wife, who makes $50,000 a year.