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You've put in the years. You're finally on the doorstep of retirement benefits. Then your boss calls you in and says you're out - three months before the finish line.

To soften the blow, the company offers you six months of severance pay. The catch? You'll need to sign away your right to sue. That's not just a bad day at the office; it's practically a financial ambush.

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Because the real question isn't whether you can survive for half a year on a severance check. It's whether walking away means leaving hundreds of thousands of dollars in current and future retirement benefits on the table.

What really happens if you're cut loose early

Getting laid off before you qualify for retirement benefits is both a giant inconvenience and a huge reshaping of your financial future. If you were due a pension, missing the vesting date could wipe out a lifetime monthly check. If your company matched your 401(k) contributions, you could lose years of accumulated matches if they aren't vested yet. And if your job came with stock options or restricted shares, those can vanish overnight when your employment ends.

Health care is another landmine. Most companies cut off your coverage with your job, and continuation coverage through COBRA isn't cheap.

Fidelity estimates that individual COBRA coverage routinely tops $700 per month, with family rates rising to more than $2,000 a month. If you were counting on subsidized retiree health coverage, being pushed out early could saddle you with considerable costs.

In short, the stakes go well beyond six months of salary. Your retirement security is also at risk.

Read more: How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you'll need a substantial stash of savings in retirement

Can they really do this to you?

Here's the gray area: Under federal law - specifically the Employee Retirement Income Security Act (ERISA) - employers can't fire you solely to block you from collecting retirement benefits. On paper, that should protect workers. In practice, it's murky.

Companies can often frame layoffs as restructuring, cost-cutting or a“business necessity.” Unless you have hard evidence that your firing was designed to cheat you out of retirement, proving intent is difficult.

And a rumor you may have heard - that companies must honor retirement if you're within six months of eligibility - is false. There's no automatic grace period. Benefits are determined by the hard lines written into your plan documents, not by sympathy or a handshake promise.

That's why employers time layoffs the way they do. They know many workers would rather take the check than face a legal battle.

Severance versus the long game

So what should you do? Start with the math.

A six-month severance sounds appealing: If you make $80,000 a year, that's about $40,000 in cash. But that money is taxable, and it can disappear quickly. Compare that to a pension worth $1,500 a month for life. Over a 20-year retirement, that's $360,000 before inflation. Add in potential lost 401(k) matches, stock grants and health insurance , and the severance can look like pennies compared to what's at stake.

The problem is that fighting for those benefits isn't easy. Suing under ERISA can be slow, costly and uncertain. Companies can have lawyers on retainer, and they count on employees deciding it's not worth the battle. But if the value of your lost benefits dwarfs the severance check, then talking to an ERISA attorney may be the smartest financial move you'll ever make.

“You don't want to make this decision lightly because pretty much once you make that decision, you're kind of stuck with it to a degree,” financial adviser Murs Tariq said on the recent 10 Step Layoff Survival Guide episode of the Peach of Mind Wealth Management podcast

“And really, this is where we would say you want to be able to think that through with someone so that they can look at the entire picture.”

Being laid off just shy of retirement may be bad luck, but it can also be a calculated strategy by your company to limit long-term liabilities. Whether you should take the severance or fight back comes down to cold numbers: what you're being offered versus what you're losing.

If you're staring down this situation, don't let emotion or intimidation make the call for you. Know exactly what your pension, health coverage and retirement benefits are worth. Get those numbers in writing. Then decide whether six months of breathing room is enough to walk away, or whether the fight for what you've earned is the only real option.

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

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