Retirement vs. Resignation
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Resignation involves voluntarily quitting your job at anytime during your tenure. This tenure can be two weeks, two years or two decades. When you retire, you also quit your job, but you fulfill requirements that make you eligible to receive continuing benefits, including health insurance and monthly retirement paychecks. Depending on the company, the processes you must follow to properly resign or retire vary.
Company policies differ, but the industry standard involves giving a two-week resignation notice to your employer. Check with your human resources department if you're unsure which company official should receive your notice. Keep the notice professional and provide concrete dates. Providing a two-week notice is the minimum standard. Staying longer to train your replacement shows you value the company and its success. Create an exit document that lists your day-to-day duties and steps to completing them. Your employer will appreciate this. Remember, you never know when you'll need a good word from your former supervisor.
Retirement is not as straightforward as resigning. To retire, you have to meet age and length of service requirements. Policies differ among companies. For example, XYZ Corporation may require you to complete 20 years of service and be at least 65 years old. Some employers, such as the Federal government, will let you retire at a certain age if you've met a minimum length of service such as five years. Unlike resigning, retiring usually requires that you submit your retirement paperwork a few months in advance. Some companies offer retirement counseling services; others also offer health insurance to retired employees.
Many companies offer a 401(k) retirement account to which you and the company contribute funds. Vesting occurs when you work for the company long enough to receive all funds in the account. You don't have to retire to become vested. If you resign without being vested, you can receive refunds of any payments made to a retirement fund or 401(k) less employer contributions. You can also keep the money in the account or roll it over to another retirement fund. Retirees meeting retirement qualifications are fully vested and will receive all funding for retirement, including company contributions. As a retiree, you will receive your funds in monthly payouts over your retirement.
Social Security Benefits
Social Security is a retirement system whereby the government provides benefits to retired Americans. You can begin collecting upon retirement at the minimum age of 65 or 67 depending on your birth date. The benefit amount takes into account the years you've worked throughout your lifetime and wages earned. You can retire as early as 62, but you'll receive a discounted portion of your full benefit. You can contact the SSA anytime during your working life and request a statement of your projected Social Security benefits. You don't have to retire from a particular job to receive Social Security funds.
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- Social Security Administration: Retirement Age Calculator
- Office of Personnel Management: FERS Information - Eligibility
- Department of Labor: What You Should Know About Your Retirement
Michelle Dwyer is a U.S. Army veteran writing fiction and nonfiction since 2003. She specializes in business, careers, leadership, military affairs and organizational change and behavior. Dwyer received an MBA from Tarleton State University/Texas A&M Central Texas and an MFA in creative writing from National University in La Jolla, Calif.