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Millions of Americans have been forced to take “early retirement” packages in recent years—even in companies that are financially stable. This can be a shock, especially to employees who’ve dedicated years of faithful service to an employer.
But when you’re forced to take early retirement, you have to look out for yourself first. Before you walk out the door, ask your boss, your Human Resources department, and yourself the following questions.
Do you have a case of age discrimination?
Age discrimination is sometimes difficult to prove. But there are a few signs you can look for to determine whether your company did force you out purely because of age. First, were you the only one fired? If others were let go too, were they all in your age range? If new people were hired to replace you, were they all significantly younger?
In addition, did anyone in a firing position at your company make comments about your age? Are there emails or minutes documenting this in writing? Any voicemails recorded? Proving intentional age discrimination can be difficult because often these comments aren’t recorded. If they are, you most likely have a strong case for age discrimination.
Can you get full retirement benefits?
If you’ve been working at your company for a long time, you’re probably fully vested in their retirement program. But if you were only hired a few years ago, you may not be—and you should definitely investigate this before you leave for good.
If you’re forced to retire in your fifties or sixties, the job market won’t be as easy for you as it might have been when you were in your thirties. And leaving this job without full retirement benefits could have a devastating impact on your financial stability. Talk to your boss and your Human Resources department to find out about your retirement status—and insist that your company provides you with full benefits.
Are you eligible for Social Security?
If you’re under age 62, you won’t be able to withdraw Social Security benefits yet—and this could also have an impact on your financial stability. But even if you’re over age 62, a forced retirement could affect your Social Security withdrawals. That’s because the earlier you start withdrawing, the lower your Social Security payments will be.
Check out the Social Security Administration’s online calculator to find out how much your payments would be if you retired now—as opposed to the age when you would have chosen to retire.
How are you going to get health care?
Medicare isn’t available until you’re age 65. If you’re forced to retire early, does your company offer to cover you until Medicare kicks in? This is also something you should ask your Human Resources office or your boss about before you leave for good. If your company won’t cover you until Medicare kicks in, you could be forced to buy individual insurance—and finding an affordable plan can be extremely difficult for older individuals.
In 2014, the situation may change once Obama’s health care measures for the uninsured kick in, and you may be eligible for government subsidies on health care costs—but you’ll still be stuck buying on the open market. Try to get your company to cover your health care until you’re eligible for Medicare.
What’s your current financial situation?
How much do you have in your retirement savings right now? How many accounts do you have, and how much interest are they pulling in? What about your spouse’s retirement income? Get your financial house in order—and sit down with a financial advisor to figure out your financial situation. Knowing whether you can afford to retire right now—or whether you’ll have to find another job right away—will help you plan for the next few years.
Retirement should be by choice. But some older workers have that choice made for them. If you’re stuck taking an early retirement package before the time you were planning to retire, ask yourself and your company these questions.
Make sure that your needs will be met—either by government Medicare and Social Security programs or by your company. Be sure you know the situation with your existing retirement accounts. And assess the situation surrounding your early retirement—it’s possible you have grounds for a case of age discrimination. When forced to take early retirement, look out for your own interests—don’t assume your company will for you.