Ten Survival Tips for Forced Retirement

"Don't Let The Door Hit You On Your Way Out"

As many well know, the days when an individual worked for a company for 20 years and took a well deserved retirement-as reward for years of service-are gone with the wind. In today's economic climate, nothing is for certain and loyal employees are only valued by employers, until the bottom line needs a push into the green. It is, after all, the company's objective to make money and the investor's objective to make a return on their investment. The company won't call it forced retirement, but you may.

So why are you getting the boot? The single most immediate way a company can impact its bottom line is by reducing payroll. How does the company decide who stays and who goes? They look at revenue generation-is the employee making money for the company? But this in itself may not save your job. The company looks at salaries. If you have been with the company for a number of years, you may be making much more than the starting pay for the position. Can they hire someone less experienced for less money? The answer is probably yes. They won't have the experience and the work could suffer for a time. It certainly won't be done as efficiently as you would do it, but, hey, American companies are notoriously short sited. Today's objective is the only objective. Tomorrow? Well, there will always be another objective.

Companies will never admit it and their HR departments will vehemently deny that age is a factor in terminations, but it can play a clandestine part in the decision making process. Years of service and age are directly related. While there are all types of equal opportunity laws against age discrimination, it still exists and it can and is used as a criterion, when selecting who to eliminate. Proving age discrimination is difficult, because companies have become very good at using the "right words" and cautioning executives about how they phrase explanations. If you live in an "at will" employment state, such as Georgia, you are even more challenged to prove any type of bias by the employer. Georgia laws favor employers. Why does age matter? One of the biggest reasons-beyond that of salary-is the impact on health insurance costs. Insurers use age statistics, based on the company's employee pool, to set premiums. It is another impact on the bottom line.

So now that you know why you are headed for forced retirement-no matter what reason they gave you-let's discuss your next steps. If you are ready for retirement, good for you-you lucky dog. If forced retirement was not on your agenda, read on. If you are lucky enough to be given some notice, before the termination goes into affect, you have some time to plan and get started on finding another job. If not, you may be in for a few weeks of uncertainty, but don't panic-yet.

Survival Tips For Forced Retirement

1. Get a copy of the termination notice from your employer, stating that you are being "laid off," or being let go due to lack of work. If you don't walk out the door with this document, you may have some difficulty getting a copy once you are gone. It won't be anyone's priority-except yours. Why do you need it? The Unemployment Office will insist on it.
2. Be sure you understand your terms of separation. Will you get a severance package? How long will your health and/or life insurance continue? What is the status of money you may have paid into a pretax medical or childcare fund? What about your retirement fund or 401K? It is easy to forget to ask these questions, when your focus is on "where do I go from here?" Remember, once you are gone, other employees feel under little or no pressure to assist you with information or requests, so get the info while you still have some leverage.
3. If you have health insurance with the company, you will receive a COBRA benefits continuation notice after your termination. After you read it and pick yourself up off the floor, because you fainted when you saw how much it was going to cost per month, go shopping for health insurance with local companies. Try to find a group that you can join, such as AARP or the local chapter of the builder's association, where you can leverage group discounts. Hopefully, this will be a temporary transitional situation, until you find another employer who offers health insurance. Read the article Understanding COBRA here at Associated Content. If you are taking prescription medication, talk with your doctor or the drug manufacturer to see if you qualify for discounted or free prescriptions due to your forced retirement.
4. Immediately go to your local unemployment office and apply for unemployment insurance. Don't be shy about this. The employer must pay into the unemployment benefit fund. If you qualify for it, you have a right to apply for it. There is a qualification process that must be conducted, so that you can be approved for unemployment benefits. This takes time and, if you are out of a job, every day you aren't getting money from somewhere can put your credit and your wellbeing at risk. If you find a job, you can cancel your benefits with a phone call or online. Don't sit around hoping you will find a job soon. Apply for your benefits the day of your separation.
5. While at the unemployment office, look at existing job offerings and ask about any retraining programs they have, for which you may qualify. This is free training for work outside of your existing field.
6. If you are 62 or older, go to the Social Security website and use the online calculators to determine what your benefits would be, if you were to take retirement early. Depending on your situation, this may be a necessary option. However, run the calculator for several different scenarios-if you retire today, in six months, in a year. The benefits will be different (more) the longer you can wait. Remember that while you are looking for a job, you can (once qualified) collect unemployment benefits for up to 26 weeks, so you won't be penniless and that 26 week extension to retirement can mean extra dollars per month in Social Security benefits.
7. Do you have a 401K or other retirement savings plan with the company? If you are 57 ½ you may be able to draw from this fund as a financial resource. However, you should know and understand the conditions under which you can take the money and how it will be taxed. You can speak directly with the plan administrator, but I strongly recommend a conversation with your accountant or tax advisor as well. Remember that the plan administrator works for the plan, not for you.
8. Review your expenses and look for places to cut back. If you are going to be tight on money, you must face the reality of this limitation and look for viable ways to minimize expenditures.
9. If you are going to miss payments of any kind and you are not planning to leverage your credit accounts for day to day expenses, contact the lender or credit card company and make them aware of your situation. Request a temporary rate reduction or forbearance (suspension of payments) or deferment (delayed payments) for a limited time. Do you have "out of work insurance" on your credit cards? Invoke it.
10. If you are 55 or older, check out AARP. If you are not already a member, you may want to consider it for the discounts and the newsletter. AARP is still a very powerful lobby group and they are associated with a wide range of companies that provide services such as insurance.

Whatever you do, don't let yourself get depressed. Now more than ever-because you may be without insurance-you cannot afford to get sick. Get rest, eat properly, walk and stay active. Stay in touch with friends and family and don't be afraid to let people know you have great skills and you are looking for a new place to display them. While you are looking for work, try doing some volunteer stints. This may get you noticed and it will keep you engaged. Ever thought of being a substitute teacher?