Mandatory Retirement: What Is It?

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Mandatory retirement is also known as "enforced retirement." Can your employer force you to retire?

When it comes to planning that revered date when you walk out of the office for the last time, it’s because you have decided that you are satisfied with your career and ready to move on to the next stage in life: retirement. You can walk out confident that you’ve accomplished all that you have set out to and are financially and psychologically ready.

While most employees retire because they have decided it’s the best time to go, others have no choice. This is called “mandatory retirement” and it’s when an employer decides the date that their employee must hang up their hats for the last time.

Sound unusual? That’s because it’s, for the most part, illegal. It wasn’t always that way, mandatory retirement has been an important issue for over a hundred years. During the 1850s, the rise of the industrial economy meant that employers wanted younger workers to replace the more senior ones. Mandatory retirement was the easy solution employers were looking for.

Mandatory retirement and its discriminatory brother, hiring based on age, were the favorite methods of industrial (and later, corporate) institutions for keeping the constant stream of young workers coming through their doors. If the mandatory retiree was lucky, their employer rewarded their loyalty with a small pension.

When the Great Depression struck in the 1930s, the federal government got involved. In order to put the younger crowd in the workforce, Congress passed the Social Security Act to make it easier for workers to retire. Employers began implementing mandatory retirement at age 65, but that didn’t last long.

The Age Discrimination in Employment Act (ADEA), signed into law in 1967, prohibits the ability of an employer to treat workers over the age of 40 differently than their younger counterparts. This includes decisions in hiring, firing, promotions, layoffs, wages, and benefits. The law introduced a phased elimination of mandatory retirement in most sectors. By 1993, mandatory retirement was an antiquated practice firmly in the past.

But there are exceptions (of course), but they only apply to specific professions. So unless you’re a pilot, air traffic controller, federal law enforcement officer, firefighter, Supreme Court justice in Florida or New Jersey, or judge in Maryland or New Hampshire, then mandatory retirement is illegal in your line of work.

There are other specific exemptions. Certain executives and high-level policymakers can be forced into retirement if they are at least 65 years old, have been in the role two years before retirement, and they have to receive benefits or compensation of at least $44,000 per year.

Unless you fall into these categories then you are protected under the ADEA. You can relax knowing that you decide when to hit the golf course.

What do you think of mandatory retirement? Do you think it’s a good thing for certain professions? Discuss in the comments below.

Can you spot the $207,744 difference between these identical homes?

Financing is the difference!

Get the details in The 62+ Loan Homebuyers Guide.

55places Mortgage is a joint venture between Mutual of Omaha Mortgage and 55places.com.
Details here.

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I agree that 55places and its affiliates, partner providers or agents may call, text, or email me about my inquiry, which may be made with automated means. I understand that my consent is not a prerequisite for buying a property. I may revoke my consent at any time by contacting optout@55places.com. Message/data rates may apply. I also agree to 55places.com’s Privacy Policy and Terms of Use.

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