Older tech workers are retiring at 55. But claiming Social Security early offers smaller checks for life.

Older workers who’ve been laid off could struggle to find a new job. Not only are there fewer tech jobs amid industry-wide layoffs, but they may also face ageism in an industry that has often favored younger (6)employees (6).

This isn’t just an issue in the tech industry. About four in 10 retirees say they left the workforce earlier than planned, according to a 2025 survey by the Employee Benefit Research Institute and Greenwald Research. And seven in 10 say the reason was something out of their control, such as changes at their (7)workplace (7).

If you retire at 55 and take Social Security at 62, you lock in smaller checks for life. And without an employer-based health plan, you’ll need to cover the gap until Medicare kicks in at age 65.

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Can you afford to retire early?

Deciding whether you can afford to retire early starts with creating a retirement budget (if you don’t already have one).

If you’re retiring before age 62, Fidelity recommends saving 33 times your expenses, assuming an annual withdrawal rate of 3%. That’s lower than the oft-suggested withdrawal rate of 4% or 5%, but a smaller withdrawal rate will stretch out your savings over a longer (8)retirement (8).

The earliest you can claim your Social Security retirement benefit is 62, but you’ll get a permanently reduced benefit by up to 30%. If you wait until your full retirement age, or FRA (between 66 and 67), you’ll receive 100% of your benefit. And if you wait until after your FRA, your monthly benefit increases by 8% each year up to age 70.

Even if you retire early, you may want to delay your Social Security benefit until your FRA and bridge the gap with other savings. Most retirement accounts will penalize withdrawals before age 59 1/2. You may be able to withdraw from your 401(k) when you turn 55, thanks to the Rule of 55, but that could reduce your overall nest egg down the road.

Healthcare is another consideration. If you lose your job, you may be able to keep your existing employer-based health plan for up to 18 months under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

You could also join your spouse’s employer-based health plan. If that isn’t an option, check what’s available in the public marketplace. The average monthly premium of an ACA marketplace plan is $625, but varies widely depending on your age and the state where you live (9).

If you’ve been forced into retirement before you’re ready — and don’t feel you have enough saved to last throughout your golden years — you may want to consider part-time work in a field other than tech.

You could also look for ways to earn passive income, such as turning your basement into a rental suite, downsizing to a smaller home or, like Otteson, moving to another region with a lower cost of living.

It’s a good idea to talk with your financial adviser to determine whether you’re ready for early retirement and how to maximize withdrawal strategies to stretch your savings.

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Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.

Tech Journal (1); The Seattle Times (2); Payscale (3), (4); Forbes (5); U.S. Equal Employment Opportunity Commission (6); Employee Benefit Research Institute (7); Fidelity (8); KFF (9)

This article originally appeared on Moneywise.com under the title: Older tech workers are retiring at 55. But claiming Social Security early offers smaller checks for life.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.