While staying loyal to one company for more than a decade might seem like a safe path to retirement, the truth is, loyalty doesn’t always pay off.

Take the case of Joan. She’s 62, has worked at the same company for over 12 years, and plans to retire at 70. But her salary hasn’t kept pace with inflation — she figures she’s shortchanged by about $20,000 a year. If her pay had kept up, she could be contributing an extra $1,500 to her 401(k) annually, plus receiving more in employer matches.

Now Joan feels undervalued, especially when her boss insists the company can’t afford raises while celebrating strong earnings. Frustrated, she’s tempted to quit, but with just eight years until retirement, she’s unsure if this is a smart move. Would quitting actually leave her better off, or could it backfire this close to retirement?

Joan’s story might sound familiar. If you’ve been with your company for years but feel underpaid, here’s what to consider.

The obvious pro to leaving a business that’s underpaying you is that you’ll stop feeling undervalued. This can help your mental health. If you can find another job that pays better, you’ll also improve your finances. You can invest more, build a better nest egg, boost your Social Security benefits, and have more discretionary income to spend between now and retirement.

However, there are also some serious downsides to quitting, including a pretty big risk that you could struggle to find new work or end up unemployed for a long time.

The Bureau of Labor Statistics reports a 4.2% overall unemployment rate in July 2025 for all workers 16 and over. Since most economists think the natural unemployment rate is anywhere between 4% and 5%, that’s not too bad. The unemployment rate for those 55 and older is even better, at 2.9%.

Still, recent data show that the job market in the U.S. experienced a sharp decline in jobs added, with only 73,000 added in July. Plus, some data from previous months must be revised downward, which points to a weak market. And, while older people may not be experiencing high rates of unemployment, it can still be harder for them to find new work. While age discrimination in the workplace is illegal, it happens, with the AARP reporting that 64% of workers 50 and older have seen or experienced it.

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All of these risks are worth considering, as these are critical retirement saving years, and finding yourself with no job could jeopardize your ability to grow your nest egg the way you need to in order to enjoy retirement.

Given those trade-offs, Joan may decide walking away isn’t worth the risk. But that doesn’t mean she has to simply accept being underpaid. There are steps she can take to improve her position without quitting.

Read more: Rich, young Americans are ditching stocks — here are the alternative assets they’re banking on instead

If you don’t quit, you should make a case to your manager and HR for why you deserve a raise. Gather as much data as you can related to your performance, the current cost of living, inflation, and the current market rate of your role, request a meeting with your manager and HR, and explain why you feel like your current compensation is not commensurate with your performance or market rate.

If you’re unsuccessful, focus on managing the money you are making as wisely as possible. For example, cutting back on other expenses to step up your 401(k) contributions could be worthwhile, since retirement is so near. Saving more could potentially even help you retire sooner, so you can leave your current work environment faster.

Making a detailed budget and looking for things you can cut, like unused streaming services or an expensive cell phone plan, could help you identify ways to save more so you can have the retirement you deserve, even if your company isn’t paying you enough.

Of course, even if Joan makes all the right moves — from pushing for a raise to trimming her budget — the deeper problem remains: being consistently underpaid can wear you down both financially and emotionally.

When you give your company your best for more than 10 years, you don’t expect to be underpaid, especially since earning less than you should can have negative consequences for your financial security and mental health.

If you would be earning $20K more a year if your salary was in line with inflation, this affects the annual amount you can contribute to your 401(K). If 7.5% of your salary goes toward retirement savings (including employer match), this can mean you invest $1,500 less each year. Over time, that adds up. If you were to miss eight years of investing $1,500 per year (and assume an average 8% annual return), your investment account would be $15,954.94 smaller.

Since Social Security benefits are also based on average earnings in your 35 highest-earning years, earning a salary that’s too low means giving up benefits you should be entitled to.

Beyond the finances, it’s also really hard to feel like your company cares about you if they aren’t giving you raises that at least help you avoid diminished buying power.

A May 2025 Mercer survey showed employers delivered average merit-based salary increases of 3.2% so far this year, and a total increase of 3.5% including merit-based promotions and those based on rising costs of living.

If you’re not getting regular raises, you’re not only losing financial momentum, but you may feel like your company just doesn’t care about you at all. This can be especially frustrating if your company keeps celebrating high earnings, but then your boss turns around and tells you they don’t have the money to give you a raise.

Quitting in that situation wouldn’t be entirely unexpected, but before you make that leap, it’s critical to weigh the pros and cons carefully. For Joan, the numbers suggest that walking away so close to retirement probably isn’t the wisest move. Still, her frustration is real, and she’s far from alone. As inflation eats into paychecks and companies boast strong earnings while holding back raises, more workers nearing retirement may find themselves wrestling with the same difficult question: stay put, or walk away?

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