Forced Retirement: What’s Next?

There is a host of issues to deal with after getting fired, including healthcare insurance

By Maggie Fitzgibbon

 

Retirement isn’t always planned. Forced retirement, job elimination and company cutbacks are all difficult circumstances. But for anyone who’s older than 60, this can be overwhelming and frightening.

What do you do if you find yourself close to retirement age but you are suddenly unemployed?

Your first step is to contact your company’s human resources office and inquire about any benefits that you are eligible for such as severance or vacation pay, paid time off, sick pay, profit sharing, pensions, health savings account (HSA), stock options and bonuses.

Depending on your company’s policies, any employee separated from service may be owed these benefits.

A call to your financial planner should be a priority. This professional can give you the best advice on your next steps. If you are 59 1/2 years old, you may want to consider tapping into your 401k or your IRA funds. At age 55 you can also draw from your company-sponsored retirement plan without penalty.

You may have rights to certain healthcare insurance benefits such as COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage. While this allows an employee to continue enrollment in the same healthcare insurance plan with no change in coverage or providers, the cost is out of pocket. This may be expensive.

In New York state, another option is to research the New York State Department of Healthcare Marketplace at nystateofhealth.ny.gov. This website has many different healthcare plan options for individuals and families. Information must be provided including demographics, income, family members and any other health insurance coverage.

Theresa Seils is a licensed insurance broker affiliated with Rochester-based Income Maust & Leone Advisors. She explained this process.

“There are different options to compare. You can choose the plan that best fits your needs based on coverage and costs. Some qualifications must be met and once your income is verified, you also may be eligible for a tax credit,” she said.

Seils explained that private pay is another possibility. Like COBRA, all costs are out-of-pocket. It is time-consuming to research different healthcare insurance companies and the plans offered and finalize choices. Depending on the plan chosen, this can be expensive.

Marion Schrader is also a licensed insurance broker located in Rochester. She explained that healthcare insurance can be expensive. Purchasing insurance through the New York State Department of Healthcare Marketplace is an option, but as Seils explained eligibility is income-based. For a married couple, if one spouse is Medicare-eligible and the other is not, the options can depend on how the couple files tax returns.

“If a couple files separate tax returns, then the spouse who needs healthcare insurance might be able to find a more affordable plan,” Schrader said.

She suggests that any person run all the different healthcare insurance coverage scenarios.

“Everyone’s situation is different,” Schrader said.

In 2023, Nancy Peters-Necaster, a Clarkson resident, found herself unemployed at the age of 63. The company she worked for was downsized and her job was eliminated. Stunned by this news, she knew she had to make some important decisions. She contacted her human resources office to inquire about any benefits she was owed.

“I received some severance pay and was eligible for healthcare insurance via COBRA coverage but the cost was very expensive. I needed healthcare because my husband is retired and on Medicare,” she said.” “I decided to check out the New York HealthPlan Marketplace and I shopped the plans. I was able to find a plan that was low-cost with good coverage.”

Peters-Necaster also recommends that anyone who is let go from their job check on their healthcare savings account. She found that her former employer was charging her an administrative fee, something she had never encountered before.

Eastman Kodak Company was a worldwide leader and also the largest employer in the Rochester area for decades. In the 1990s, Kodak experienced serious financial losses which resulted in many cutbacks and job layoffs. After a 25-year career with Kodak, Rochester resident Kevin Donnelly was without a job.

“While I worked at Kodak, I also worked for Monroe Ambulance. So when I was let go from Kodak, I still had another income. Unfortunately, Monroe Ambulance did not offer any health insurance plans,” he said. “I had a family with young kids so I needed to find a job with healthcare.”

Over the next 30 years, Donnelly worked at various jobs including as a technician at two Rochester medical facilities. His experience as a volunteer firefighter helped him to land a job as a fire insurance investigator with Paul Davis Restoration. This new job offered a great benefits package.

“But after almost a year, the company made some changes and downsized. My job was eliminated,” Donnelly said.

Feeling unsure of what to do next, Donnelly took a job as a school bus driver, but although the work was full-time and the benefits were great, he was not happy.

“I was 62 years old. I could not enroll in Medicare yet. I didn’t know where to turn for assistance. I reached out to a healthcare insurance broker who after 30 minutes had me enrolled in a healthcare plan with good coverage,” Donnelly said. “This broker put my mind at ease and relieved me of this stress.”

Peters-Necaster and Donnelly agree that while job elimination and company downsizing are stressful, there is a life after forced retirement.

“Have a plan, make sure you can make some cutbacks. Talk to your financial planner who can help you figure out your finances and next steps,” Peters-Necaster said.

“Relax, keep your eyes open for odd jobs and look at your options,” Donnelly said. “Every day is a new day; wake up, put your feet on the ground, keep moving forward and always have faith.”