I’m 59, earning six figures, but my daughter wants me to retire to watch my future grandkid for a year. Can I afford it?
“My daughter is getting married next year and will try to get pregnant immediately.” (The subject of the photo is a model.) – MarketWatch photo illustration/iStockphoto
I am 59 years old. For the last four years my income has been the highest it has ever been; close to six figures. I went through many years (15) where I was not working or earning a low income because I was raising a family. However, I worked the minimum number of months required to qualify for Social Security. I also have a good 401(k) and should be able to tap into my husband’s Social Security. He plans to wait until Full Retirement Age, when he will receive the maximum benefit.
My daughter is getting married next year and plans to get pregnant immediately. He asked if I would be his caregiver when he returned to work for at least the first year. I would be honored to do it, and he would pay me a small allowance to cover gas and other expenses, but it would be nowhere near my current income. I know I need to find health insurance, which will be expensive, but I think I can cover this and other expenses with savings.
If this arrangement breaks down after the first year, I can probably find another job, even if it’s not at my current income level. I have two questions. First, if I stop working at age 61, how will this affect my Social Security earnings record? My Full Retirement Age is 67. Second, if I rolled the money from a traditional 401(k) to a backdoor Roth IRA, would the tax payments have any impact on my Social Security record?
Those major life events that come your way (your daughter’s wedding, finally bringing a little bundle of joy to the family, and all the beautiful moments in between) are magical. But don’t get so caught up in the excitement that you forget the very important necessity of retirement planning. This is true in any situation, but especially when you consider that the traditional retirement age is earlier after sacrificing your earnings for decades.
First, to answer your questions: Social Security benefits are based on your earnings history. If you stop working at age 61, your benefits will be calculated regardless of your earnings record to date. The Social Security Administration uses your 35 highest earnings years to determine benefits; so if you are currently in your peak 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 impact on your Social Security record because it is not related to earned income. However, the conversion will create a tax bill in the year the money is moved.
You also said your spouse will receive maximum benefits at Full Retirement Age. I just want to clarify that Full Retirement Age is the period during which the individual 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 start as early as age 62, which results in a reduced monthly payment. However, for years between Full Retirement Age and age 70, the agency encourages late benefits by offering delayed retirement credits. I only mention this because you mentioned “maximum benefit”.
Now let’s get back to your reality.
For most people, this stage of life is called the catch-up period for retirement savers. As you’ve experienced, many adults aren’t able to save much for the future when they’re in the middle of starting a family. Some are forced to allocate most or even all of their paychecks to emergency expenses like housing, utilities, education and extras for children. Others make sacrifices, such as leaving the workforce to raise children or taking lower-paying jobs to balance both work and family. Later in life, some workers like you reach their highest earnings.
Before making any decisions about early retirement, carefully consider how giving up your highest-paying job will affect your long-term financial well-being. Consider what your financial situation would look like if you stopped early to care for your grandchild or continued to work.
I understand why your daughter would ask you to take care of your future grandchild. Child care is expensive and quality care can be difficult to find. It was also thoughtful of him to offer payment, as not every family makes such arrangements; Many people assume that grandparents will handle child care. At the same time, leaving your job to provide full-time care means giving up significant potential earnings, especially if it’s only for a year. This includes not only your salary but also any investment growth you may earn from ongoing contributions to your retirement accounts.
It can be difficult to return to the workforce in your mid-to-late 60s. Age discrimination is unfortunately common in hiring, and the stress of having to work because your retirement savings are insufficient is very different from choosing to work for pleasure.
Private health insurance can also be costly. If your husband’s job doesn’t cover you, or he turns 65 and enrolls in Medicare before you do, you’ll have to cover your premiums yourself. This expense can quickly eat away at your income or savings. If you’ve budgeted for it, great, but if not, keep that in mind. The average monthly health care premium for a 60-year-old was $1,319 in 2025 and is projected to be about $1,600 in 2026, according to Kiplinger.
The time you spend with your grandchild is meaningful and you will obviously consider it an honor. If this is that important to you, you’ll need to be meticulous about your finances. Sit down with your husband and analyze the numbers. Look at how much you’ve saved and how much you expect to spend each year in retirement. Factor in housing, utilities, food, entertainment, medical expenses, transportation, travel, and other expected expenses. Also include a buffer for unexpected expenses like roof repairs or vehicle maintenance so you don’t have to tap into retirement funds early.
A useful rule of thumb is the 4% rule. In short: If you withdraw about 4% of your retirement savings in the first year and adjust for inflation each year thereafter, your savings should last about 30 years. For example, if you have $1 million in retirement savings, the first year’s distribution would be $40,000. If retirees aren’t ready to leave the workforce entirely, they often supplement these distributions with Social Security, a pension, or part-time work.
Maybe you can arrange a part-time schedule with your daughter; Some days you can continue working at your high-paying job, while other days you can keep an eye on your grandchild. This approach allows you to maintain your income, stay covered through Medicare, and reduce child care expenses you would otherwise face.
This is your life and you have options. You are not committed to this job and should pursue what is important to you. But before taking care of others, make sure you secure your own financial future.
