If your company’s dropping hints that it might be time for you to retire, it’s easy to feel like you’ve become irrelevant. Here’s the truth: you hold all the power if your company wants you to retire. That’s because firing you based on age alone could subject them to an age discrimination lawsuit. So talk to a lawyer. Consult with a financial advisor, then negotiate a retirement package that works for you.
Consider How Early Retirement Affects Your Bottom Line
Retiring early can cost you more than just the income you would have earned at your job. Your retirement accounts will have less time to accrue interest payments. You might have to wait to be eligible for Medicare. If you still owe on your mortgage, more of your money will go toward mortgage interest. Retiring early could also mean smaller Social Security payments.
Make a detailed list of the ways early retirement affects your bottom line. Then look at ways to compensate for it. For example, if you are over 62 and own your home, you might be able to access money through a reverse mortgage. This loan doesn’t have to repaid as long as you live in your home and comply with the loan’s terms.
Once you know whether and to what extent you can compensate for early retirement, you know what you need to ask for. That’s when the negotiation process begins.
Know What to Ask For
You can’t get something unless you ask for it. So show up ready to negotiate, and always ask for more than you want. Don’t be afraid to highlight your long service to the company, or to mention that you don’t want to retire unless it benefits you. Some starting points for negotiation include:
- The value of your pension, as well as pension payouts to your spouse or children.
- Extended health care coverage, particularly if you’re not yet eligible for Medicare.
- A cash severance package.
- Employee stock options.
- Continuing employer-sponsored life insurance or long-term care insurance plans.
- Delaying your retirement for a set period of time.
Get Skilled Legal and Financial Advice
Pressure to retire early can be demoralizing. You might even feel like you have no choice other than early retirement. You always have a choice, particularly when your employer makes it clear that your age is a factor. Don’t sign paperwork because you feel like you have to. And don’t accept a deal that feels fair without getting outside input. You need a lawyer to read through the package, and a financial advisor to tell you whether the deal is really a deal at all. Ask for time to think it over, and if your employer won’t give that to you, proceed with immense caution.
Ask About Consulting Possibilities
Sometimes companies pressure workers to retire early because it’s cheaper to pay a younger, less experienced worker. Use this to your advantage. If you’re not yet ready to quit working, ask if you might be able to stay on as a consultant instead. The company will save money, but you’ll continue pulling in a paycheck and retain the skills that have made you a valuable commodity for all these years. That’s a win for everyone—and a huge boon to your retirement savings.