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Announcing your retirement 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 enough time to get your personal finances in order.
But what if, shortly after you’ve announced your retirement, your employer decides to show you the door before the official end date?
If you’ve already announced your retirement, it can be a frustrating and disorienting experience to be suddenly laid off after years of service. It’s also natural to wonder if your employer is breaking the law.
As surprising as it may seem, your employer is usually under no legal obligation to let you continue working after you’ve announced your retirement plans.
An AARP analysis of data reviewed by the Urban Institute and ProPublica from a Health and Retirement Report (HRS) found that 13 percent of older workers retired unexpectedly, which researchers say suggests workers were likely forced out of their jobs (1).
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 – no “just cause” required.
But you may have a legal recourse if you have evidence that your employer fired you to stop pension ‘entitlement’ or as a direct result of age discrimination. They would violate the Age Discrimination in Employment Act (ADEA) and the Employee Retirement Income Security Act (ERISA), and you may have a case on your hands.
Read more: Approaching retirement with no savings? Don’t panic, you are not alone. Here are 6 easy ways to catch up (and fast)
You have a few options if you are laid off before your official retirement date.
Your company may offer severance pay as a way to get you to waive your right to file certain lawsuits against your former employer. Try to negotiate the fairest severance package possible, including asking your employer to continue to subsidize your health coverage. Otherwise, you may be forced to get private health insurance to cover a gap in employment.
Another option is to apply for continued health coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) (2). However, COBRA coverage only applies to group health plans with a minimum of 20 employees. Additionally, those who qualify may have to pay the full premium for their coverage, up to 102% of the plan’s cost.
The main advantage here is the continuation of your healthcare plan, but the price could be a major disadvantage depending on your financial situation.
To know where you stand, we recommend speaking with a financial advisor to understand how being let go will affect your retirement plans. And if you have the finances to support an early retirement, a financial advisor can help you plan for your golden years.
If you’re not sure which path to take amid the current market uncertainty, now might be a good time to connect with a financial advisor through Advisor.com.
This online platform connects you with vetted financial advisors who can help you develop a plan for your new wealth.
Answer a few quick questions about yourself and your finances, and the platform will match you with up to three experienced financial professionals. You can view their profile, read past customer reviews, and schedule a free, no-obligation initial consultation.
As you get closer to retirement, every dollar starts to count more.
Between rising health care costs, economic uncertainty and living on a fixed income – making a nest egg last can be a challenge.
That’s where AARP—a trusted organization for many older Americans—comes in. You can get discounts on almost everything from prescriptions and dental plans to travel, entertainment and insurance.
Even better, AARP members have access to guides that can help you get the most out of Social Security, choose the right Medicare plan, and discover other government benefits—potentially saving you thousands.
Join AARP today and you can get 25% off your first year.
By being proactive, you can ensure that your employer’s decision to force you to leave early doesn’t derail your retirement goals.
“You may not have 40 years left, but you have today. And that’s enough to start turning the ship around,” noted financial guru Dave Ramsey told Kiplinger.com (2).
Building a financial buffer can help you get through this difficult time without compromising your lifestyle or taking on additional debt. You may want to invest in safe assets such as gold, which tend to provide stable returns over time while hedging your portfolio against the risks of inflation and recession.
One way to invest in gold that can also offer significant tax advantages is to open a gold IRA with the help of American Hartford Gold.
The Gold IRA allows investors to hold physical gold or gold-related assets in a retirement account – combining the tax advantages of an IRA with the protective benefits of investing in gold, making it an option for those looking to protect their retirement funds against economic uncertainties.
Even better, you can often roll over existing 401(k) or IRA accounts into a free gold IRA with up to three years of free storage, maintenance and insurance. To learn more, get your free 2025 Precious Metals Investing Insights Guide.
Eligible purchases can also receive up to $25,000 in free silver.
But make sure you don’t keep all your eggs in one basket. If all your money is tied up in stocks or precious metals, an emergency expense could force a withdrawal during a market downturn or put you in debt.
If you don’t have a consistent source of income, financial experts like Ramsey recommend keeping at least 12 to 18 months’ worth of expenses in your emergency fund.
“While adequate retirement savings is essential, an emergency fund ensures income stability no matter what happens—health issues, home repairs, or market downturns,” according to Marty Burbank, founder of OC Elder Law (4).
“Retirees can’t predict future costs or market changes, but an emergency fund helps ensure the financial security to fully enjoy retirement.”
Keeping your emergency fund in a high-yield savings account can help ensure your money stays accessible while earning interest.
For example, you can get up to 3.90% APY (3.25% base APY and 0.65% growth in the first three months) on your emergency fund with a Wealthfront Cash Account through program banks. That’s about 10 times the national deposit savings rate, according to the FDIC’s January report.
A Wealthfront Cash Account also lets you pay bills, set up direct deposits and cash checks while earning great interest.
With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic bank transfers, you can ensure that your funds remain accessible at all times. Additionally, Wealthfront Cash account balances up to $8 million are FDIC insured through program banks.
We only rely on verified sources and credible third-party reports. For details, see editorial ethics and guidelines.
AARP (1); Department of Labor (2); Kiplinger.com (3); GoBankingRates (4)
This article provides information only and should not be construed as advice. Offered without warranty of any kind.
