Thank you. What you have described is legal for several reasons.
First, an employer has the legal right to require an employee to answer questions.
If an employee refuses to answer those questions or cooperate in an investigation, the employer has the right to fire the employee.
Second, when one asserts the Fifth Amendment, that only protects the person with respect to criminal prosecution.
Asserting the Fifth Amendment does not afford any job protections.
That's a very big distinction. Huge.
Lastly, an employee has the right to resign/retire.
Thus, collectively, if you did not resign or retire the employer could have still fired. It was perfectly legal for the employer to inform the employee that if there is not a resignation there will be a termination
It may be distasteful but it's legal. Again, the Fifth Amendment only provides protections relative to criminal prosecution -- it's not a tool for job protection.
I know that this is not what you wanted to hear but you deserve a candid answer. I wish very much that I could offer you an answer that was more favorable to your circumstances, but the law seems to be pretty clear. Had I been able to provide an Answer which might have given you a successful outcome, it would have been my pleasure to do so.
I hope you understand.
My goal is to provide you with excellent service – if you feel you have gotten anything less, please reply back. I am happy to address follow-up questions. Thank you for your business!