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I’m 59, Making Six Figures, But My Daughter Wants Me to Retire for a Year to Help With My Future Grandkid. Can I Afford It?

This question pops up in my inbox more often than you’d think. You’re in a good spot—close to retirement, earning solid money—and suddenly your daughter asks you to hit pause on your career for a year to help raise her baby. Sounds heartwarming, but can you really swing it financially?

The Real Deal: What’s at Stake Here?

Let’s say you’re pulling in $120,000 a year. After taxes, health insurance, and retirement contributions, you might actually be bringing home around $80,000. If you stop working for a year, you’re not just losing that paycheck—you’re also missing out on adding to your retirement savings and possibly reducing your future Social Security benefits.

It’s a common trap to only look at the salary you’d miss. But there’s a ripple effect that’s easy to overlook.

Think about it like this: you won’t just lose one year’s income. You’ll also miss out on the growth your retirement contributions could have earned over time. Plus, Social Security benefits are based on your top 35 earning years, so a zero in there could shrink your monthly checks down the road.

What Have You Got Going for You?

Before you decide, take stock. Have you been maxing out your 401(k)? Got other investments or savings? A good rule of thumb is aiming to have about 70–80% of your pre-retirement income per year once you retire.

Here’s a quick reality check:

• Add up all your retirement savings, investment accounts, and cash on hand.
• Estimate your yearly expenses, including healthcare premiums if you lose employer coverage.
• Factor in what you expect from Social Security and any pensions.

If you can cover a full year without income without dipping deep into your nest egg, that’s a good sign. But for many, this exercise reveals there’s not as much wiggle room as they thought.

The Hidden Costs You Might Miss

Most people focus on the paycheck they’d lose but forget the opportunity cost. For example, if you usually contribute $20,500 to your 401(k) plus a catch-up if you’re over 50, that’s money you won’t put in—and money that won’t grow over the next decade.

Let’s say you miss out on $27,000 in contributions this year. If that money had grown at 6% annually for 10 years, you could lose out on almost $48,000 in retirement funds. That’s a big number and worth thinking about.

And about Social Security: since your benefits rely on your 35 highest-earning years, taking a year off with zero income could reduce your future monthly checks—especially if you don’t have many high-earning years to balance it out.

Health Insurance: The Tough Part

This is where many plans stumble. Retiring before 65 means no Medicare eligibility yet. COBRA coverage can run upwards of $1,000 a month, and private insurance might not be much cheaper.

The jump in health insurance costs can swallow a huge chunk of your budget. Some try short-term plans as a workaround, but those come with risks—if you get sick, you might face huge medical bills.

The Emotional Side—Worth It, But Tricky

Money aside, spending a year with your grandchild can be priceless. Many people jump at the chance and don’t regret it for a second.

But be aware that coming back to work at 60 after a year off isn’t always smooth sailing. Age discrimination is real, and depending on your field, your skills might not be as hot as they used to be.

If you’re in a fast-changing field like tech or finance, a year away can set you back. But in areas like education or healthcare, re-entry might be easier.

Some Real-World Tips If You’re Thinking About It

• Test Your Budget Now: Try living on your expected retirement budget for a few months before you take the leap. If you’re struggling now, it might be a red flag.
• Ask About Leave Options: Check with HR if unpaid leave or sabbaticals are an option. It’s rare, but even part-time work could keep your foot in the door.
• Get a Financial Checkup: Talk to a fee-only financial planner—not just your 401(k) provider. Run your numbers through different scenarios, including market downturns and surprise expenses.
• Think About Social Security Timing: If you’re close to 62, delaying Social Security might lead to bigger benefits later on. If you take it early, plan for a reduced monthly amount.
• Look Into ACA Plans: Depending on your income, you could qualify for subsidies that help with health insurance costs during your year off.

When It Might Not Be the Right Time

If your savings are thin, you’ve got big expenses like a mortgage, or you’re already worried about stretching your money through retirement, taking a year off probably isn’t the best move.

Also, if you carry high-interest debt, stepping away from your paycheck is risky—those bills won’t wait for you.

The Bottom Line

Taking a year off at 59 to spend time with your grandchild is a beautiful idea. But the numbers can be tough. If you’ve got a solid financial cushion and your expenses are manageable, it could work out.

If you’re unsure, don’t gloss over the details. Run the math, think about the hidden costs, and weigh the career and emotional factors. Instead of just asking, “Can I afford to do this?” try asking, “What will this mean for me five or ten years down the line?”

Because at the end of the day, you want to savor that special year, not stress over every penny.

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