Aug 23, 2025
Retirement planning can be a long and complicated process, so when the time comes to hand in your notice, you’re probably counting down the days.
But what if your company has other plans for you?
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In this scenario, would-be retiree Alex — who is 66 — gave his company a year's notice, providing the exact date of his planned retirement.
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But management only hired a replacement a few weeks before Alex’s retirement date — not enough time to properly train his replacement.
Now they want him to stay for two months as a part-time consultant to fully train his replacement.
Here's what Alex should know before he makes his decision one way or the other.
How this can impact retirement benefits
If Alex opts to take on the consultancy but starts collecting his Social Security in the meantime, he could lose part or all of his benefits temporarily.
There’s a cap on how much income you can earn while collecting benefits before full retirement age. The good news is that payments are recalculated at full retirement age to account for any benefits that were held back.
Of course, Alex could delay claiming Social Security, which would increase the benefits he ultimately receives. Each month you delay your claim from age 62 (earliest eligibility) to 70 results in a higher monthly benefit.
Delaying his claim and charging a decent consulting fee could enhance Alex’s future Social Security benefits, which are based on one’s average earnings over their 35 highest-earning years.
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But as Alex is considering a short-term company gig, the boost to his benefits may not add up to much.
If he chooses to delay his retirement beyond a few months, Alex could invest more in his 401(k) or workplace pension. He could also stay on his employer-provided health insurance for longer.
In general, the longer you work and delay Social Security, the better your finances in retirement. You’ll have greater monthly benefits and can keep your retirement savings invested and earning a return for a longer period of time.
In Alex’s case, if he’s unsure about his nest egg, extra work could actually be a blessing in disguise.
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When to say no
Of course, Alex may not want to work anymore, particularly if his finances are in good shape.
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Remember: You don't owe it to your employer to stay past your state retirement date.
It all comes down to whether you'd be happier working longer to shore up your finances or you have all the money you need for a dream retirement.
There may be no real reasons to stay on if you have plenty of money to live on at a safe withdrawal rate (typically around 4% of your account balance) and you're confident in your choice to claim Social Security at the age it makes most sense to you.
In fact, you could regret working longer if you miss out on precious, healthy years of retirement when you could be enjoying life to its fullest.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
