“My daughter is getting married next year and will try to get pregnant right away.” (The subject of the photograph is a model.) – Photo illustration MarketWatch/iStockphoto
I am 59 years old. In the last four years, my income has been the highest it has ever been for me – almost six figures. I had many years (15) where I did not work or earn a small 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 draw on my husband’s social security. He plans to wait until full retirement age, at which point he will receive the maximum benefit.
My daughter is getting married next year and plans to try to get pregnant right away. She asked if I would babysit her when she went back to work, at least for the first year. I would be honored to do that, and she would pay me a small allowance to cover gas and other expenses, but it would be nowhere near my current income. I know I would have to figure out health insurance, which will be expensive, but I think I could 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 age 61, how would that affect my Social Security earnings record? My full retirement age is 67. Second, if I were to move the money from a traditional 401(k) into a Roth IRA in the back, would the tax payments have any effect on my Social Security file?
The future grandmother
See: The pension allows me to defer Social Security benefits. What if I want survivor benefits early?
These major life events coming up for you—your daughter’s wedding, finally welcoming a tiny bundle of joy into your family, and all the beautiful moments in between—are magical. However, don’t get so caught up in the excitement that you forget the crucial need for retirement planning. This is true in any situation, but especially so when you’re considering an earlier-than-traditional retirement age after decades of sacrificing earnings.
To answer your questions first: Social Security benefits are based on your earnings history. If you stop working at age 61, your benefits will be calculated based on any earnings you’ve had up to that point. The Social Security Administration uses your highest 35 years of earnings to determine benefits, so if you’re currently in your highest earning years, those extra years of work will increase your benefit. As for moving money from a traditional 401(k) to a Roth IRA, that would have no effect on your Social Security file because it is not tied to earned income. However, the conversion would generate a tax bill in the year the money is moved.
You also mentioned that your spouse will receive the maximum benefit at full retirement age. I just want to clarify that full retirement age is when a person receives 100% of the calculated benefit, but the maximum benefit is actually achieved by deferring benefits until age 70. The Social Security Administration allows benefits to begin as early as age 62, which results in a reduced monthly payment. However, for the years between full retirement age and age 70, the agency encourages delaying benefits by offering delayed retirement credits. I only mention this because you referred to a “maximum benefit”.
Now back to your reality.
For many, this stage of life is called the catch-up period for pension savers. As you’ve experienced, many adults can’t save much for the future while they’re about to start a family. Some need to put most—or even all—of their paychecks toward 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 juggle both work and family. Later in life, some workers, like you now, reach their peak earnings.
Before making 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 would look like if you continued to work versus if you stopped early to watch your grandchild.
I understand why your daughter would ask you to watch your future grandson. Childcare is expensive and quality care can be hard to find. It’s also thoughtful of her 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 giving up significant potential earnings. This includes not only your salary, but also any investment growth you may earn from continued contributions to your retirement accounts.
Returning to the workforce in the mid to late 60s can be challenging. Ageism is unfortunately common in employment, and the stress of needing work because your retirement savings aren’t meager is very different from choosing to work for pleasure.
Private health insurance can also be expensive. If your spouse’s job doesn’t cover you—or if he turns 65 before you enroll in Medicare—you should cover your own premiums. This expense can quickly affect your income or savings. If you’ve budgeted for it, great, but if not, be aware. According to Kiplinger, the average monthly health care premium for a 60-year-old was $1,319 in 2025 and is projected to be nearly $1,600 in 2026.
Time with your grandchild is meaningful and it is clear that you would consider it an honor. If it means that much to you, you’ll need to be meticulous with your finances. Sit down with your husband and crunch the numbers. Look at how much you’ve saved and how much you expect to spend each year in retirement. Consider housing, utilities, food, entertainment, medical expenses, transportation, travel, and any other expected costs. Also include a buffer for unexpected expenses, such as roof repairs or car maintenance, so you don’t need to tap into your retirement funds prematurely.
A useful rule of thumb is the 4% rule. Long story 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, your 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 could arrange a part-time schedule with your daughter, continuing to work some days at your well-paid job while seeing your grandson on other days. This approach will allow you to maintain your income, stay insured until Medicare, and reduce any childcare costs you would otherwise face.
This is your life and you have options. You are not tied to this job and should pursue what matters to you. But before you take care of others, make sure you have secured your own financial future.
