I'm 63 years old, worked hard my entire life, and I just got fired after announcing my retirement. Is that even legal — and what are my options from here?
Announcing your retirement a few months in advance is often considered a courtesy to your company. Not only does it give your employer time to manage the transition and hire a replacement, but it also gives you plenty of time to get your personal finances in order.
But what happens if, shortly after you announce your retirement, your employer decides to show you the door ahead of your official end date?
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If you've already announced your retirement, it can be a frustrating and disorienting experience to suddenly get fired after years of service. It's also natural to wonder if your employer is breaking the law.
Unfortunately, in many cases, you have no legal recourse. However, you do have some finance options if this happens to you.
Can an employer fire you after you announce your retirement?
Surprising as it may sound, your employer is not typically under any legal obligation to let you keep working once you’ve announced your plans to retire.
That's because most states have at-will employment laws. An at-will employee can be fired at any time for any reason and without warning — and without having to establish “just cause.”
Therefore, so long as the reason isn’t illegal — i.e. firing an employee over race, religion, age, gender, sexual orientation, or disability status — the short answer is: yes. You can be fired after your retirement announcement.
However, if you believe your employer has violated the Employee Retirement Income Security Act (ERISA) — which includes firing someone in order to stop their pension from “vesting” or to prevent them from reaching “full employment status” — you may have a case on your hands.
In addition, you may have some legal recourse if you have evidence that your employer fired you as a direct result of age discrimination. This would be in violation of the Age Discrimination in Employment Act (ADEA), which prohibits employers from firing employees over the age of 40 solely on the basis of their age.
If you believe you’ve experienced a violation of either the ERISA or ADEA, it’s worth contacting a lawyer who specializes in employment law.
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What should you do if you're forced into retirement early?
If you're terminated before your official retirement date, you have a few options. To start, though, you may want to consider talking with a tax advisor before making any withdrawals from your 401(k) or pension fund. This will help you avoid possible unwanted tax penalties.
Your company may offer severance pay as a way to get you to waive your right to file certain lawsuits against your former employer.
If you’re not comfortable signing off on a severance agreement, a lawyer or other professional finance expert will help you understand your rights before you agree to sign anything.
Aim to negotiate the fairest possible severance package, including asking for your employer to continue subsidizing health coverage.
In most states, you can apply for unemployment benefits if you lost your job after age 62 and still plan to continue working — so long as you weren’t fired “for cause.”
According to the National Council on Aging (NCOA), you can still collect unemployment benefits while also receiving Social Security payments if you’ve reached the minimum age of 62.
However, as NCOA points out, if you received a severance package or draw a pension, your unemployment compensation may be reduced.
What you’ll likely want to avoid, though, is claiming Social Security ahead of your original schedule. That's because each month you file for benefits prior to age 70 results in a smaller check than you'd otherwise have qualified for. The benefits reduction is for life, so try to hold out so you can get your first payment at the optimum time.
If your employer isn't subsidizing health insurance, you may be able to keep your employer-based coverage under the federal law known as COBRA, for a period of time. That being said, doing so may be expensive as you’d have to fork over money for full premiums without your employer footing some (or most) of the monthly payments.
You may also want to investigate a new health plan through federal or state health insurance marketplaces.
If you’re already over the age of 65, consider signing up for Medicare if you haven’t done so already. It’s worth noting that there are some big changes coming to Medicare in 2025 that you may want to look into.
By being proactive in your response to your termination, you can hopefully ensure that your employer's decision to force you to depart early doesn't derail your retirement goals.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
