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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 get your personal finances in order.
But what happens if, shortly after you announce your retirement, your employer decides to show you the door ahead of your official end date?
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If you’ve already announced your retirement, it can be a frustrating and disorienting experience to suddenly get fired after years of service. It’s also natural to wonder if your employer is breaking the law.
Can an employer fire you after you announce your retirement?
Surprising as it may sound, your employer is not typically under any legal obligation to let you keep working once you’ve announced your plans to retire.
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 some legal recourse if you have evidence that your employer fired you to stop your pension from “vesting” or as a direct result of age discrimination. These would violate the Age Discrimination in Employment Act (ADEA) and Employee Retirement Income Security Act (ERISA), and you may have a case on your hands.
What should you do if you’re forced into retirement early?
You have a few options if you’re 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 possible severance package, including asking for your employer to continue subsidizing your health coverage.
To know where you stand, you may want to consider talking with a financial advisor to understand how being let go will impact 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.
Finding a financial advisor that suits your specific needs and financial goals is simple with Vanguard.
Vanguard’s hybrid advisory system combines advice from professional advisers and automated portfolio management to make sure your investments are working to achieve your financial goals.
With a minimum portfolio size of $50,000, this service is best for clients who already have a nest egg built and would like to try to grow their wealth with a variety of different investments. All you have to do is set up a consultation with a Vanguard advisor, and they will help you set a tailored plan and stick to it.
Make sure to budget for health care expenses in case you decide to retire early. An average 65-year-old is estimated to need roughly $165,000 to cover health care expenses through retirement, according to the 2024 Fidelity Retiree Health Care Cost Estimate.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
If your employer isn’t subsidizing health insurance, you may be able to keep your employer-based coverage under the federal law known as COBRA, for a period of time.
That said, doing so may be expensive as you’d have to fork over money for full premiums without your employer contributing to monthly payments. You can look to reduce this bill by opting for private third-party insurance.
For those under the age of 65, U65 Health Insurance lets you compare policies offered by reputable providers near you for free.
You can shop around and compare policy premium rates and features from leading insurers like Anthem, Oscar Health and Aetna within minutes.
Get started and find the right coverage for you in under five minutes.
If you’re already over the age of 65, consider signing up for Medicare if you haven’t done so already. Keep in mind that there are some big changes coming to Medicare in 2025 that you may want to look into.
Prepare your finances for this scenario
By being proactive, you can hopefully ensure that your employer’s decision to force your early departure doesn’t derail your retirement goals.
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-haven assets like gold, which tends to deliver stable returns over time, while hedging your portfolio against inflation and recession risks.
One way to invest in gold that also provides 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 within 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 gold IRA without tax-related penalties. To learn more, get your free 2025 information guide on investing in precious metals.
Qualifying purchases can also receive up to $20,000 in free silver.
But make sure not to keep all your eggs in one basket. If all your money is tied up in stocks or precious metals, an emergency expense might force a withdrawal during market downturns or drive you into debt.
If you don’t have a consistent source of income, financial experts recommend keeping at least 12 to 18 months worth of expenses in your emergency fund.
“While saving adequately for retirement is crucial, an emergency fund ensures income stability no matter what comes — health issues, home repairs or market drops,” said Marty Burbank, founder of OC Elder Law.
“Retirees can’t predict future costs or market changes, but an emergency fund helps ensure financial security to fully enjoy retirement,” Burbank added further.
Keeping your emergency fund in a high-yield savings account can help ensure your money remains accessible while earning interest.
Check out Moneywise’s list of best high-yield savings accounts of 2025 to compare options that earn up to 10 times the national average in interest.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
