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  • What To Do If You’re Forced Into Early Retirement

    Secure Retirement


    Americans nowadays are retiring later in life than ever, due to longer life spans, better mental and physical health, and—unfortunately—lack of savings to retire earlier. But for a growing number of older Americans, retirement age isn’t a choice. If you lose your job in the ten years or so before you planned to retire, it can be difficult to find a new job that matches your skills, interests and financial requirements. For many older Americans, finding any job at ages 50 or older is a considerable challenge. One reason is that hiring managers may be unfairly biased or ageist, not wanting to hire someone who they think will retire soon or who doesn’t have the “vigor” of a younger person. While age discrimination in hiring is illegal, it is often difficult to prove

    Being forced into early retirement is a scary prospect, but there are smart steps you can take to prepare for the possibility. If rumors are swirling at your place of work of the possibility of lay-offs, don’t wait to take stock of your current financial situation. Make sure you have access to your retirement accounts. If you are in a situation where your employer is legally required to offer severance pay, begin to consider what an appropriate package would be and how you will negotiate terms in your favor. Thinking ahead about your expectations means that you will not be blindsided should you be called into that unfortunate meeting where you get the bad news. Unfortunately, not every workplace will offer you a severance package if you are let go. Some state have laws that require employers to offer severance packages to employees when their being let go is no fault of their own, for example if the business is closing an office or downsizing. Otherwise, severance pay is only required if it is promised by the employer, like in a contract or employee handbook. Research your state laws and look over company policies.

    If you are forced to leave the job you planned to have until you retired, consider taking on a part-time job or one with lesser pay or status. Even if you have a PhD, a part time job as a cashier or saleswoman will put extra, much-needed cash in your bank account. Many older Americans are taking advantage of the growing “gig economy” and earning money by taking on part-time work, such as freelance writing, dog walking, tutoring, or driving for car services like Uber. Be thoughtful and open to job opportunities that might not align exactly with your experience or skills.

    You should also take advantage of unemployment benefits if you’re laid off. If you are forced into early retirement because of an illness, you may be eligible for disability benefits. Wait to claim your Social Security benefit until at least your full retirement age if possible. If you claim it early (which you can do starting at age 62) your benefit could be permanently reduced by as much as 30%. Learn more about claiming strategies at Also act quickly to get health insurance. You may be eligible for COBRA which allows you to keep your insurance through your employer for a period of time, but you will be required to pay the full premium yourself.  You should also look at your options available through (also known as the Health Insurance Marketplace). The Affordable Care Act required that states create these health care exchanges that will allow you the opportunity to shop for a new plan if you lose your job.

    Most importantly of all, adjust your spending habits and carefully review your budget and long-term savings so that you can plan accordingly Forced early retirement is an undesirable situation, but it is an increasingly common one—you are not alone!

    One Response to “What To Do If You’re Forced Into Early Retirement”

    1. Joyce Fortin says:

      Dear WISER,
      Read your article about being forced into early retirement. I found that it has really good info for those newly in that situation, but also find that it follows the same advice of all other articles I have read about the subject. I thought you might be interested to know what I and others have experienced. In July of 2014 I lost my job in an industry I was in for 30 years, healthcare. I did all of the things recommended; used the severance package frugally, collected unemployment, applied to all appropriate jobs that I could, went on interviews etc. Then, the severance ran dry, the unemployment ended, I did work in consulting briefly, but that has dried up, I was eligible for Medicaid, my retirement fund is now gone and, turning 62 this year, I applied for social security. I now make $1500/mo and that is $300 too much to be eligible for Medicaid. So, now there is no medical insurance and that is the thing that frightens me more than anything. I own a house and have an adult child who lives with me and pays all other expenses beyond the mortgage. What a pickle! The jobs I applied and interviewed for were filled by less experienced males who were much younger than I. Yes, we are told that age and gender discrimination is illegal…but it is practiced universally. I can work. I want to work, but I have yet to venture out to the $8/hour part time job. I am fortunate that my car is paid off and my debts are manageable, but I do fear that unexpected expense that comes with home ownership or a needed car repair. I have pretty much given up hope of ever working in the field I have been trained in and feel very “dismissed” by society. Woe is me…right? Well, I’m not done yet. I have relatively good health. I can do a lot of things to keep the house up on my own and have for years…even some auto repairs. My daughter refers to me as a female McGyver. Cute, but it does get harder as the years progress. And of course, I suppose I could sell the house, which would pain me, but I don’t expect things to get easier,so it is an option, however, the mortgage is smaller than rent would be. So, this is supposed to be a more relaxed and “fun” time of life where we can slow down and enjoy the benefits of a long working career. Well, things are definitely slowed down and I do have the time to spend on inexpensive projects and visiting friends..close by, as well as caring for elderly parents – another topic – but at 62, there’s still a lot of living to do and ability to share knowledge and skills learned over decades. But, no outlet. So, that is the message that I have for you wonderful people at WISER. We need outlets for remaining relevant. Doom and Gloom has come down on my life, and I’m sure others, and, what do you know…I survived it. I’m not always feeling good about it, and hoped to be in a different place at this age, but that “redefining yourself” thing takes a little time and it seems not to really have an end. Even while I write this to you, I am having ideas about what I can do to be more active and contribute. Thanks for taking the time to hear/see what I have been experiencing and I hope that you continue to provide help and guidance to those of us who need it. Carry on.

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    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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