Some people have the goal of retiring early, and there are certainly benefit to making a workforce exit at a younger age. But early retirement can pose different challenges.
When you retire early, you put extra pressure on your savings to last as long as you need them to. You also risk having to bridge a health coverage gap until Medicare eligibility kicks in. And you may end up claiming Social Security ahead of full retirement age in conjunction with early retirement, thereby resulting in a lower monthly benefit for life.
As such, you may decide that you don't want to retire early, but rather, on time or even on the later side. Data from Zippia finds that 67% of workers aged 40 to 65 today intend to keep working past their 66th birthdays. But unfortunately, age discrimination issues in the workplace might thwart those plans.
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A troubling trend
Zippia reports that between 2020 and 2021, age discrimination charges accounted for 21% of all complaints filed with the Equal Employment Opportunity Commission. Zippia also found that while older applicants are brought in for job interviews at a rate similar to younger applicants, older workers are offered jobs 40% less frequently than their younger counterparts with similar skills.
Now there are laws in place that prevent employers from discriminating against employees on the basis of age. But unfortunately, proving that an older worker has been laid off or demoted due to age discrimination is not always easy. Similarly, it can be very difficult to prove that a person wasn't hired due to their age.
You may want to anticipate an early retirement, just in case
A good 60% of older employees have witnessed or experienced age discrimination in the workplace, says Zippia. And given how easy it is to get away with it, that's not so surprising.
Because of this problem, you may want to err on the side of planning for an earlier retirement in case age discrimination eventually forces you out of a job. That could mean doing your part to boost your 401(k) or IRA contributions so you have more savings for a longer retirement. It could also mean planning for a backup stream of income in case you're forced to abandon your career sooner than expected.
Of course, one way to potentially buy yourself more long-term job security is to start your own business so you're not reliant on a single employer. But that's also not an easy thing to do. And you still run the risk of clients being hesitant to work with you when you're older.
All told, the problem of age discrimination is real. And it's one lawmakers sorely need to address.
But for now, take steps to give yourself the leeway to retire on the early side if that becomes necessary. And also, do what you can to boost your job skills. That gives you something to point to in a situation where you need to file a complaint against an employer who dismisses or demotes you for a reason you feel is age-related.
