Are You Ready for Your Encore in Retirement?
Working in some capacity is becoming a regular part of retirement for more and more seniors. But when you're no longer relying on a job to pay your bills or support your family, the meaning of work can take on an entirely different dimension. Transitioning to an encore career can let you make your values and your personal goals a cornerstone of your retirement life. And even if you are comfortable with the size of your nest egg, a little extra padding never hurts!
Answering these three questions can help you identify and prepare for an encore career that will make your retirement more fulfilling.
1. How can I reapply my skills?
Your career was probably a practical and marketable application of something you're good at. An encore career is an opportunity to focus on using those same skills to fulfill yourself and make a positive impact. Education, government, the environment, and nonprofits are common encore career paths. For example, an accountant could turn her love of math into a part-time teaching position. A marketing pro could help a local soup kitchen ramp up their fundraising.
Many seniors think about an encore career as the kind of job where you just show up and help a good cause for a handful of hours every week. That's certainly a noble way to spend your time. It can also be a lot less stressful and demanding than your old full-time job!
But if you're a career executive, your management skills, vision, and ambition are still extremely valuable resources. Smaller organizations struggling to grow could benefit from your professional leadership experience. Or you could channel everything you've learned as an executive into creating your own mission-driven company or nonprofit.
2. What skills can I improve?
While encore careers usually have a more altruistic focus, remember that we're not talking about volunteer work here. To start your new career, you might have to do some things that you haven't done in decades, like search for job openings, fill out applications, and participate in interviews. If your goals are more entrepreneurial, you'll have to work on a business plan that will attract interest from potential investors and top talent and differentiate you from other players in the same space.
Just like any other phase of your professional life, committing to learning and developing your skills can improve your employment prospects. And, as a retiree, the more work you put into preparing for an encore career, the more prepared you'll be to push back against any ageism that you might encounter.
Many organizations are going to put a premium on youth when they're hiring. Your experience is going to be more attractive if you can also demonstrate ways that you're staying curious and continuing to grow. Attend conferences and read trade publications so that you're up to date on the latest innovations in the field you're targeting. Take a couple online classes; if you have a longer time frame in mind, you might even work towards earning a new degree. Reach out to contacts who can help you refine your ideas or introduce you to potential employers.
Finding a job can often feel like a job in and of itself, even when you're a retiree. If you're not willing to put in that kind of effort – and if you don't really need the money – then volunteering might be a better fit for you.
3. How could an encore career affect my retirement plan?
If you're looking for ways to stay active in retirement, some benefits of an encore career are probably obvious. Having a job gives you a reason to get out of bed, get dressed, and get out of the house at least a couple days every week. With that foundational structure in place, it becomes easier to add in more activities, like exercising before work, a long lunch break with your spouse, or meeting up with friends after work. On your days off, you'll feel better about spending the afternoon with a book or playing a round of golf because you’ll know that another day of meaningful work is coming tomorrow. Retirees who find that ideal encore career sometimes tell me that they're busier in their golden years than they were when they were working full time! And on top of that, they're also happier and filled with a real sense of purpose.
However, don't overlook the challenges that an encore career can create as well.
Even if you start working less, you'll still be working. That time commitment could conflict with other retirement goals, such as spending more time with your family or travelling. Is that going to affect the lifestyle that your spouse wants to enjoy in retirement?
It's also worth examining the motivations behind your encore career. Is this job really going to make your days feel more purposeful? Or are you slipping back into workaholic habits that could be preventing you from enjoying the more relaxed retirement you’ve earned?
Finally, what are the financial implications of your encore career? Even part-time income, combined with your annual withdrawal strategy, could affect your tax status, Social Security benefits, and Medicare premiums. Accepting an executive-level position or starting your own company could have a dramatic impact on how your money supports your retirement, especially once you do stop working altogether.
For most seniors who want to keep working, it's possible to plan around these and other issues and enjoy the many positives of an encore career. Make an appointment to talk to one of Keen Wealth's fiduciary advisors and we'll discuss how we can help make your next act a success.
Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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