Experiencing a forced retirement? You are not alone! Almost half (46%) of retirees leave the workforce earlier than planned says research from EBRI. These findings are reinforced by analysis from ProPublica and the Urban Institute. They also show that more than half of older U.S. workers are pushed out of their longtime jobs before they choose to retire. Whether due to health issues, job loss, or caregiving responsibilities, an unexpected early retirement requires quick adjustments to protect long-term financial security. Let’s find out what you need to do now to thrive after a forced early retirement.
The Main Reasons Why People Are Forced to Retire Early
For many older workers, retirement doesn’t happen on their terms. In fact, the odds are high that you may be forced into leaving the workforce due to circumstances beyond your control.
According to national surveys:
- About 35% of early retirees cite personal or family hardships as the reason for stepping away from work. This includes health problems, disabilities, or the need to care for an aging parent, all of which can make it difficult or impossible to continue working.
- Another 31% of retirees report being pushed out due to changes at their company, such as downsizing, restructuring, or being laid off. In many cases, older employees struggle to find new work at comparable pay or benefits, making early retirement their only viable option.
- Only around a third of early retirees are making the choice for themselves
These forced retirements often happen abruptly, leaving little time to prepare financially or emotionally.
6 Essential Steps to Take if Facing a Forced Retirement
Being forced into retirement can feel overwhelming—but you’re not alone, and you’re not powerless. With the right steps, you can stabilize your finances, protect your future, and begin to chart a new course with clarity and confidence.
Here’s where to start:
1. Take Time to Process the News
Forced retirement can come as a shock, even if you saw it coming. Before diving into financial decisions, give yourself space to emotionally process what’s happened. It’s completely normal to feel a mix of emotions—anxiety, anger, panic, sadness, embarrassment, and maybe even relief.
Talk to trusted friends or loved ones, and consider journaling or speaking with a counselor. Emotional clarity will help you make better decisions down the road.
This isn’t just about money—it’s about adjusting to a major life change. Give yourself permission to pause.Give yourself permission to pause.
2. Focus on Your Well-Being
When routines change suddenly, your mental and physical health can take a hit. Taking care of yourself is not a luxury—it’s a foundation for resilience.
- Set small goals that create structure and purpose
- Get regular sleep, eat well, and move your body daily
- Stay connected with people who uplift you
Even a daily walk or coffee with a friend can improve your clarity and outlook.
3. Stabilize Your Short-Term Financial Situation
You don’t need to figure everything out overnight—but securing your financial footing now will give you room to breathe and plan.
Start with these steps:
- Rework Your Budget: Focus on essentials—mortgage/rent, utilities, groceries, and insurance. Cut or pause discretionary spending.
- Review Your Severance Package (if you received one): Understand the payout, benefits continuation, and any conditions.
- Apply for Unemployment: You may be eligible for benefits depending on your state and the terms of your departure.
- Use Emergency Savings Wisely: Tap into savings for essentials, but be cautious. Avoid draining accounts too quickly or using high-interest credit.
- Evaluate Health Insurance Options: If you’ve lost coverage, explore:
- COBRA continuation through your former employer
- Medicare (if you’re 65+)
- ACA Marketplace plans or Medicaid, depending on your income
Feeling in control will give you a welcome sense of calm.
4. It is Not the End of the World: Reframe Forced Retirement as an Opportunity
Being forced into retirement can feel like a setback. But for many, it becomes a turning point: a chance to rediscover purpose, reclaim time, and create a more meaningful rhythm of life.
Start by redefining what retirement means for you. Ask yourself: What do I want this next phase to look like?
- Decide what will give your retirement meaning and purpose
- Reconnect with hobbies or passions that got sidelined during your working years
- Explore volunteering, mentorship, or part-time work that aligns with your values
- Prioritize your health—emotionally, mentally, and physically
- Try writing a retirement manifesto to clarify what gives your days meaning
- Read stories from others who’ve thrived after an unexpected retirement, like Scott Allen’s journey
Retirement isn’t just the absence of work—it’s the presence of purpose. And, it’s okay to define that on your own terms.
5. Assess If You Afford Retirement Right Now
Okay. Once your near-term financial situation is stable, it is time to take a look at whether you can truly afford to retire earlier than you had anticipated.
This requires a holistic financial evaluation and development of a holistic financial plan. Use the Boldin Planner to calculate:
- All future income sources: Social Security, pensions, annuities, rental income, part-time work
- Savings & investments: How will you draw down? Are you factoring in growth and inflation?
- Lifestyle spending: How will your needs and wants change over the next 10, 20, or 30 years?
- Longevity projections: Planning to age 85 is one thing—planning to 95 is another
- Health care & housing costs: Often the largest—and least predictable—expenses
- Think carefully about where you want to live and whether or not you are willing to use home equity to fund your retirement
- Taxes & the broader economy: Don’t forget the role of tax strategies and market behavior
If you find your current plan falls short of your retirement vision, explore trade-offs. Run infinite “what if scenarios” using Boldin:
- Could you Work part-time in a lower-stress job? Do you want to switch careers? Or, would you prefer other compromises? Play with different levels of work income to see what really works for you.
- Would you consider downsizing or retiring abroad somewhere less expensive? Housing is usually your most valuable asset as well as biggest cost and there is a lot you can do to improve your budget by switching up your housing plans.
- Are there expenses you’re willing to cut? Explore 24 ways to cut costs for retirement.
- Are you optimized to reduce taxes and maximize income from savings?
Keep adjusting until the numbers—and the lifestyle—match what you want.
6. Put Your Plan into Action
Once you’ve clarified what’s possible and what’s needed, the next step is to start living your plan.
- If retirement is feasible, update your budget, adjust your investments, and align your lifestyle to your new income level
- If you need more income, explore part-time work, consulting, freelance, or even gig work that fits your pace
- Review your legal and estate documents: Update your will, power of attorney, and healthcare directives
- Check in regularly: Life keeps changing. Your plan should too.
A clear plan turns fear into focus. And with Boldin, you’re never navigating alone.
Final Thoughts on a Forced Retirement
Being forced into retirement can be challenging, but by taking these proactive steps, you can regain financial stability and confidence. Whether you embrace full retirement or seek new opportunities, this transition can be a chance to create a fulfilling next phase of life.
Updated June 9, 2025