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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 sort out your personal finances.
But what if, shortly after announcing your retirement, your employer decides to show you the door before your official end date?
If you have already announced your retirement, it can be a frustrating and disorienting experience to suddenly be fired after years of service. It is also natural to wonder if your employer is breaking the law.
As surprising as it may be, your employer is typically under no legal obligation to keep you working once you’ve announced your plans to retire.
An AARP analysis of data examined by the Urban Institute and ProPublica from a Health and Retirement Study (HRS) report found that 13% of older workers entered retirement unexpectedly, which researchers say suggests that workers were likely forced out of their jobs (1).
This is 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 legal recourse if you have evidence that your employer fired you to stop your pension from “running out” or as a direct result of age discrimination. These violate the Age Discrimination in Employment Act (ADEA) and the Employee Retirement Income Security Act (ERISA), and you could have a case on your hands.
Read More: Nearing retirement with no savings? Don’t panic, you are not alone. Here are 6 easy (and fast) ways to catch up
You have a few options if you are terminated 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. Aim to negotiate the fairest severance package possible, including asking your employer to continue subsidizing 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 continuation of 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. In addition, those who qualify may need to pay the entire premium for their coverage, up to 102% of the plan’s cost.
The main advantage here is the continuation of your health care plan, but the price can be a big disadvantage, depending on your financial situation.
To know where you stand, you may want to consider talking to a financial advisor to understand how the departure will impact your retirement plans. And if you have the finances to support early retirement, a financial advisor can help you plan for your golden years.
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As you get closer to retirement, every dollar starts to matter more.
Between rising health care costs, economic uncertainty and living on a fixed income — making ends meet can feel like 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.
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By being proactive, you can hopefully ensure that your employer’s decision to force your early departure does not derail your retirement goals.
“You may not be 40 years old, but you’ve got it today. And that’s enough to start turning the ship around,” Dave Ramsey, the well-known financial guru, said Kiplinger.com (2).
Creating a financial buffer can help you weather this challenging time without compromising your lifestyle or taking on additional debt. You may want to invest in safe assets like gold, which tend to deliver steady returns over time, while hedging your portfolio against the risks of inflation and recession.
One way to invest in gold that can also provide significant tax advantages is to open a gold IRA with the help of American Hartford Gold.
Gold IRAs allow 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 potentially hedge 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 information guide to investing in precious metals.
Qualifying 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 of expenses in your emergency fund.
“While adequate savings for retirement is crucial, an emergency fund ensures income stability no matter what happens – health issues, home repairs or a downturn in the market,” according to Marty Burbank, founder of OC Elder Law (4).
“Retirees cannot predict future expenses 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 you earn interest.
For example, you can get up to 3.90% APY (3.25% base APY and 0.65% boost during the first three months) on your emergency fund with a Wealthfront Cash Account through program banks. That’s roughly 10 times the national savings deposit rate, according to the FDIC’s January report.
Wealthfront Cash Account also lets you pay bills, set up direct deposits and cash checks while collecting high interest rates.
With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, you can ensure that your funds remain accessible at all times. In addition, Wealthfront Cash Account balances up to $8 million are FDIC insured through program banks.
We rely only on verified sources and credible reporting from third parties. For details, see our editorial ethics and guidelines.
AARP (1); The Department of Labor (2); Kiplinger.com (3); GoBankingRates (4)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.