- 2-Minute Article
Turning Interests Into Retirement Income
Use these tips to help make an encore career a success.
Retiring doesn’t always mean leaving the workforce entirely. In fact, 70% of American workers say they plan to continue working in retirement.1 Many of them are even becoming entrepreneurs. In fact, people over age 50 are two times more likely than millennials to say they’re looking to start a new business in the next 12 months.
Why are so many working past traditional retirement age? For some, it’s a financial necessity but for many others, working in retirement is more about meaning than money.2
So-called encore careers are an opportunity to pursue lifelong interests or purpose-driven work. Research shows that the satisfaction that comes from working in retirement can improve social engagement and emotional health — and even extend your life.3
However, your post-retirement career may not be as lucrative as your previous one, so it’s crucial to have a solid financial foundation.
Before you embark on an encore career, calculate your overall expenses and work with your financial professional to assemble a plan that will meet your needs. This plan might combine withdrawals from retirement savings accounts, along with a baseline “paycheck” from annuity income and other stable sources that can supplement wages from your new job.
Here are five more tips to make the most of an encore career:
Encore careers are a chance to try something new. Don’t be afraid to challenge yourself or try your hand at jobs you hadn’t considered before.
What do you love to do? What causes are you passionate about? Identifying your top interests can help you identify potentially engaging areas of work.
Consider the skills you’ve mastered throughout your career. Do you have extensive experience in management, accounting, or event planning? These capabilities might translate into an encore career outside of traditional corporate settings, such as starting a small business or working for nonprofit organizations or schools.
Once you’ve considered your interests and skills and have finalized an income plan with your financial professional, it’s time to start exploring options. Volunteering is a low-risk way to try out different types of work. These organizations can be a great place to start and to find inspiration for how other retirees are creating their own second acts:
After finding an encore career, you can inspire other retirees with your own story. Sharing details about how you overcame challenges or found meaningful opportunities is a way to give back for the assistance you received on your own journey.
Talk with your financial advisor to discuss these and other factors to consider before starting an encore career.
Related Partner Education:
Discover the unique considerations financial advisors must take for those who plan to work past normal retirement age or work in retirement. Read Working Through Retirement, developed in partnership with Dow Jones Solutions for Barron’s.