A 63-year-old worker was fired shortly after informing his employer of his intention to retire, a move he described as “upsetting” after “a lifetime of work.” The situation raises a critical question: Can a company legally dismiss someone who has already announced they are leaving?
According to reporting from Yahoo’s Moneywise, most of the U.S. follows “at-will” employment, which allows companies to terminate workers without having to provide a reason. Even so, experts warn that employers do not have unlimited leeway. As they explain, “firing someone because of their age or to prevent a pension from vesting violates the law,” in line with the federal ERISA (Employee Retirement Income Security Act) rules on pension plan rights and standards.
Specialists highlight two key federal laws that protect workers in this situation:
- The Age Discrimination in Employment Act (ADEA): Prohibits employment actions based on age.
- The Employee Retirement Income Security Act (ERISA): Bars employers from firing a worker to keep their pension benefits from taking effect.
The key question is proof. A court will look for evidence that your retirement plans (and the company’s desire to avoid associated costs) were a motivating factor in the decision to fire you. As they stress, “if the employee can show that either motive played a role, the company could face legal consequences.”
Immediate options for workers pushed into early retirement
The report notes that it’s common for companies to offer a severance package. Advisors recommend negotiating assertively because “severance agreements often include clauses waiving the right to sue.” They also encourage workers to request continued employer contributions toward health insurance, a cost that tends to rise significantly in the years leading up to retirement.
Experts further recommend reviewing the financial impact of early termination with a professional. As they point out, “a financial advisor can determine whether someone is truly ready to retire or needs to adjust their plan.” Platforms like Advisor.com allow users to “compare advisor profiles, read reviews, and schedule an initial consultation with no obligation to hire.”
On health-care costs, analysts remind readers that a typical 65-year-old American will need about $165,000 to cover medical expenses throughout retirement, according to Fidelity’s 2024 estimates. Before age 65, affected workers may continue their employer-based coverage through COBRA, though experts warn that “costs jump sharply because the employer stops paying its share.”
Alternatively, private health-insurance policies can be compared through services like U65 Health Insurance, which allow users to review offers from insurers such as Anthem, Oscar Health and Aetna. For those already over 65, the recommendation is to “review Medicare options and the changes coming in 2025.”
How to protect your finances after an unexpected job loss
Experts stress the importance of planning ahead. They recommend building an emergency fund that covers “12 to 18 months of expenses,” especially for those without a stable source of income. They also point to assets that act as safe havens in uncertain times, such as gold.
The report mentions gold IRAs, which combine tax advantages with investments in physical precious metals. Companies like Priority Gold offer promotional bonuses, although the report did not specify the amount of silver included.
As attorney Marty Burbank sums it up: “An emergency fund provides stability when health issues, home repairs or market downturns arise.” He adds that “retirees can’t predict every future expense, but that cushion allows them to enjoy retirement with greater peace of mind.”
