“My daughter is getting married next year and will try to get pregnant immediately.” (The subject of the photo is a model.) – Photo illustration by MarketWatch/iStockphoto
I am 59 years old. For the past four years, my income has been the highest it’s ever been for me — close to six figures. I had many years (15) during which I did not work or earn a low income because I was raising a family. However, I have worked the minimum number of months required to qualify for Social Security. I also have a decent 401(k) and should be able to benefit from my husband’s Social Security. He plans to wait until Full Retirement Age, at which point he receives the maximum benefit.
My daughter is getting married next year and is planning to try to get pregnant immediately. She asked if I would be her babysitter when she returned to work, at least for the first year. I would be honored to do so, and she would pay me a small allowance to cover gas and other expenses, but it would be nowhere near my actual income. I know I will need to find health insurance, which will be expensive, but I think I can cover that and other expenses with savings.
If this arrangement fell apart after the first year, I could probably secure another job, although it wouldn’t be at my current income level. I have two questions. First, if I were to stop working at 61, how would that affect my Social Security earnings record? My Full Retirement Age is 67. Second, if I were to move money from a traditional 401(k) to a backdoor Roth IRA, would the tax payments have any effect on my Social Security record?
Future Grandma
See: My pension allows me to delay Social Security benefits. What if I want survivor benefits earlier?
These major life events coming up for you — your daughter’s wedding, eventually welcoming a little bundle of joy into the family, and all the beautiful moments in between — are magical. However, don’t get so caught up in the excitement that you forget the very crucial need of retirement planning. This is true in any situation, but especially when you are considering an earlier than traditional retirement age after decades of sacrificing your earnings.
To answer your questions first: Social Security benefits are based on your earnings history. If you stop working at 61, your benefits will be calculated based on any of your earnings records up to that point. The Social Security Administration uses your highest 35 years of earnings to determine benefits, so if you are currently in your highest earning years, these additional years of work will increase your benefit. As for moving money from a traditional 401(k) to a Roth IRA, it will have no effect on your Social Security record, as it is not related to earned income. However, the conversion generates a tax bill in the year in which the money is moved.
You also mentioned that your husband would have received the maximum benefit at his Full Retirement Age. I just want to clarify that Full Retirement Age is when an individual receives 100% of their calculated benefit, but the maximum benefit is actually achieved by delaying benefits until age 70. The Social Security Administration allows benefits to begin at age 62, which results in a reduced monthly payment. For the years between Full Retirement Age and age 70, however, the agency incentivizes delaying benefits by offering delayed retirement credits. I only mention this because I referred to “maximum benefit.”
Now back to your reality.
For many, this stage of life is called the recovery period for retirement savers. As you have experienced, many adults cannot save much for the future while raising a family. Some want to allocate most – or even all – of their wages to immediate expenses, such as housing, utilities, education, and extras for children. Others make sacrifices, such as leaving the workforce to raise children or taking lower-paying jobs to combine both work and family. Later in life, some workers, like you now, reach their peak earnings.
Before you make any decisions about early retirement, think carefully about how giving up your highest-paying job will affect your long-term financial well-being. Consider what your finances will be like if you continue to work versus if you quit early to see your grandchild.
I understand why your daughter asks you to watch your future grandson. Childcare is expensive, and quality care can be hard to find. It is also her intention to offer payment, as not every family makes such arrangements – many simply assume that the grandparents will take care of the children. At the same time, leaving your job to provide full-time care, especially if it’s only for a year, means significant potential earnings. This includes not only your salary, but also any investment growth you may earn from ongoing contributions to your retirement accounts.
Returning to the workforce in the mid to late 60s can be challenging. Age is unfortunately common in hiring, and the stress of having to work because your retirement savings dwindle is very different from choosing to work for fun.
Private health insurance can also be expensive. If your husband’s job doesn’t cover you — or if he turns 65 before you and enrolls in Medicare — you’ll need to cover your premiums. That expense can quickly eat into your income or savings. If you’ve budgeted for this, great, but if not, keep it in mind. According to Kiplinger, the average monthly health care premium for a 60-year-old was $1,319 in 2025 and is estimated to be nearly $1,600 in 2026.
Time with your grandson is meaningful, and it’s clear that you consider it an honor. If it’s that important to you, you’ll need to be meticulous with your finances. Sit down with your husband and analyze the numbers. Look at how much you have saved and how much you expect to spend each year in retirement. Factor in housing, utilities, groceries, entertainment, medical expenses, transportation, travel, and any other expected expenses. Also include a buffer for unexpected expenses, such as roof repairs or car maintenance, so you don’t need to tap retirement funds prematurely.
One useful rule of thumb is the 4% rule. In short: if you withdraw about 4% of your retirement savings in the first year and then adjust for inflation each year, your savings should last about 30 years. For example, if you have $1 million in retirement savings, the first-year distribution would be $40,000. Retirees typically supplement these distributions with Social Security, a pension, or part-time work if they are not ready to leave the workforce entirely.
Perhaps you can arrange a part-time schedule with your daughter, continuing to work some days at your high-paying job while watching your grandson on other days. This approach allows you to maintain income, remain insured through Medicare, and reduce any child care costs you would otherwise face.
This is your life, and you have choices. You are not tied to this job, and you should follow what matters to you. But before you take care of others, make sure you have secured your financial future.
