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John, 61, was all set for retirement.
He was approved for Social Security, and then, just before he gave his notice, was laid off. His severance package covered him until his Social Security payments could start.
With four years to go until 65, he would have to cover health insurance costs on his own.
A new opportunity then arose, making him reconsider his plans. John’s old employer offered him a team-leading, client-facing role in a department he had always wanted to join. The pay and benefits are strong.
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He’s tempted, but he can’t see himself working beyond the end of the year. He also wonders if it’s fair to take a leadership job he intends to leave soon. Besides, going back to an employer that had already let him go once seems like a pretty big risk.
That’s the core of his dilemma. Here’s what else is at stake.
What’s his situation?
Let’s say John is married and that, hypothetically, his 60-year-old spouse has also been on his employer plan. His partner is two years away from Medicare eligibility.
The couple has roughly $1 million saved — about $940,000 in 401(k)s and IRAs and $60,000 in cash — with a nearly paid-off mortgage.
Americans believe they need about $1.26 million to retire comfortably in 2025, according to Northwestern Mutual. (1) So John and his wife are within striking distance of that “magic number” even without maximizing Social Security, but not quite yet.
Working longer would obviously boost their retirement savings. However, for John, the new job may be about more than just money.
Many older Americans say work also offers critical access to health insurance and Social Security benefits. Respondents to the University of Michigan’s National Poll on Healthy Aging (2) claimed other important factors include having a sense of purpose, contributing to society, keeping their brain sharp and maintaining social connections.
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Would working longer help substantially?
Taking the job could help John in four ways.
- 1. Social Security. If John begins withdrawing Social Security at 62, he will receive about 30% less in monthly benefits than if he waits until he reaches 67, which is full retirement age (FRA). If he holds off until 70, he’ll earn delayed retirement credits of about 8% per year.
- 2. Health insurance. Staying employed until he is 65 can help John avoid expensive pre-Medicare premiums.
- 3. Increase savings. Working for even 12–24 months could allow him to top up his accounts and possibly utilize the age-based “super catch-up” provisions (3) of up to $34,750 in 2025 for individuals aged 60–63. From here, he may want to stash his cash in something like a high-yield checking and savings account with SoFi and earn up to 4.50% APY Plus, SoFi charges no account, monthly or overdraft fees.
The best part? You can get up to $300 when you sign up with SoFi and set up a direct deposit.
- 4. Health and happiness. There’s also a non-financial upside: Older adults who keep working often report stronger mental and overall well-being. (2) If the new role is genuinely interesting, John may enjoy staying in the workforce a bit longer.
What should John do?
John is in the lucky position of having a choice.
The benefits of taking the new client-facing, team-leading job include being better off financially — perhaps even physically and mentally as well. If he loves the work, values the benefits, can pause his Social Security claim, and is willing to give the role a good two-year run, then he should take the job.
A simple way to square ethics with opportunity is to accept that he can commit to 18–24 months and be transparent about a limited horizon.
Conversely, if John’s determined to stick to his plan of retiring within a year and is happy with the money he’s already saved, he may be better off turning down the offer. Exiting in under a year can create transition pain — and possibly bruise his relationship with his employer and colleagues.
It might make sense for John to consult with a qualified financial advisor to determine the best path forward. For personalized advice on retirement planning, Advisor.com connects you with participating unaffiliated third-party registered investment advisors (RIAs) through its matching tool or provides personalized investment advice via its in-house wealth management service, Advisor Wealth Management.
From their database of thousands, you can find a pre-screened financial advisor you can trust. You can then set up a free, no obligation consultation to see if they’re the right fit for you.
But, overall, John is in a good position either way.
If the job is truly the dream, the benefits suggest that he should do one last lap for two years. By then, he can retire on his terms. But he’s also in a good position to retire now and cover pre-Medicare insurance without straining the plan.
Whatever he chooses, it’s important he stays on top of his net worth so that he’s well prepared with income forecasts and any necessary budgeting.
If managing a budget feels overwhelming to you, apps like Rocket Money can simplify the process.
Rocket Money tracks and categorizes your expenses, providing a clear view of your cash, credit, and investments in one place. It can even uncover forgotten subscriptions, helping you cut unnecessary costs and save potentially hundreds annually.
For a small fee, the app can also negotiate lower rates on your monthly bills, making it a valuable tool for keeping your finances on track.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Northwestern Mutual (1); University of Michigan (2); Fidelity (3)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.