The biggest threat to your retirement is based on a myth — it could rip through your nest egg and even ruin your health

According to a 2018 study by Becca Levy, who teaches social and behavioral sciences at the Yale School of Public Health, the U.S. is forking out $63 billion a year as a result of ageism in healthcare.

“I don’t think ageism has changed dramatically since then,” Levy told Moneywise, adding that if anything, the healthcare costs have risen with inflation.

It’s a big problem in the labor force too. Just as U.S. sociologists Michelle Budig and Paula England identified the “motherhood penalty” — a phenomenon in which employers pay mothers less and assume they’re less committed and capable — there’s an age penalty that hits older workers in the pocketbook.

Here’s a closer look at why ageism is so costly and how older Americans can fight back to protect their retirement.

Ageism can cost older workers their retirement

The nonprofit advocacy group Vantage Aging cites common job-threatening stereotypes about older workers. These include the assumptions that older employees are slow learners (when they tend to have better attention spans) and are baffled by technology.

In fact, according to a study by LinkedIn and AARP, twice as many workers aged 50 and over in the past five years have added AI and similar skills to their LinkedIn pages (compared to younger peers).

Sara Stegall, a chartered professional accountant with the Seattle firm Maris & Associates, told Moneywise that such assumptions can drive employers to push older workers out, devastating retirement plans. Such workers may be forced to draw on Social Security early, permanently reducing their benefits by up to 30%.

“A few years of age bias at the end of a career can reshape 30 years of retirement income, not just a few paychecks,” she wrote in an email.

Ann Arbor, Michigan-based sociologist Pamela Cohen backs this up. She studies behavioral economics as a consultant. For 20 years, she’s studied workplace challenges such as sexism and ageism, and she says ageism is “uniquely expensive” for older workers.

She cited a 2018 ProPublica and Urban Institute investigation that found that after age 50, more than half (56%) of workers had gone through at least one involuntary layoff — and 90% had to accept lower wages if they were rehired. That’s a big if.

“Ironically, we keep telling Americans they have to work longer to afford retirement, but they’re encountering a labor market that is not there for them,” Cohen told Moneywise.

Recent Bureau of Labor Statistics data demonstrates the stark difference in rehiring rates of older versus younger Americans who were laid off between 2023 and 2025. By January 2026, only 57% of those aged 55 to 64 were rehired compared to 73% of their younger peers. Of the older workers who remained unemployed, 21% gave up and left the workforce.

“If a 58-year-old is pushed out or downshifted, they don’t just lose those paychecks, they lose the highest-earning, highest-saving years of their life, the ones meant to do the heavy lifting right before retirement,” Stegall said.

Workplace ageism may also be particularly difficult for women. A survey by Women of Influence+ found that almost 80% of women had experienced age-related discrimination at work.

Cohen said that both employers and workers need to be part of the solution. She said employers need to stop looking at age as an indicator of a worker’s adaptability or commitment.

But she added that older workers must address any concerns employers might have head on, highlighting their qualities as individuals.

“[Older workers] really need to emphasize their adaptability, technical skills, energy, ambition and ability to work in the future, rather than simply talking about how age equals experience,” she said. “Focusing on these individual characteristics will help older workers make the most headway.”

Ageism hits health and related costs

In her research, Levy found that Americans who absorb negative stereotypes about older people end up developing health issues later in life.