The idea of “Retiring Well” has been revolutionized. Until recently, workers expected to work for the same company for forty years, then go home and stay there. However, many of today’s retirees want something more, and launch “encore careers”.
What is your Encore Career?
An “encore career,” is an employment transition typically made during the latter part of one’s career, after financial independence has been secured. It often involves a change to the social sector or a public-interest field. A research study from Penn Schoen Berland found that approximately 9 million Americans between the ages of 44 and 70 are in encore careers, with an additional 31 million interested in pursuing one.
The challenge of choosing an encore career can be somewhat daunting, and you may not know where to start. HCM borrows a simple formula from social entrepreneur Barbara Greenspan Shaiman, and suggests thinking about it like this:
Your personal passion (e.g. playing music, gardening, cooking, crafting, teaching, etc.) + what makes you angry (e.g. income inequality, global warming, cruelty to animals etc.) = your potential encore career.
What to Consider in your Encore Career
When you’re considering your encore career, think about the key strengths that made you successful in your professional career. Beyond that, what causes are you passionate about? If you’re a great crafter, you could sell your crafts to raise funds for a cause that’s close to your heart. If you’re an excellent writer or orator, consider mentoring at-risk youth in those skills so they’re better prepared to face the world as adults. In this stage, it’s important to not only figure out what your encore career will be, but why it should be your encore career.
Many people in encore careers find community and meaning in their work, leading to increased satisfaction in retirement. Additionally, many retirees earn income from their encore career, which can help increase the efficiency of your financial plan. For example, income from your encore career could help you defer claiming Social Security, thus earning you delayed credits and therefore adding tax efficiency and longevity protection to your retirement.
What to do Before Starting Your Encore Career
Before you dive headfirst into your encore career, be sure to test your idea. Survey your community to find what needs improvement, what’s missing, and what resources could be shared with the less fortunate. It can be helpful to go directly to the communities you want to help and discuss your idea with them.
A valuable resource in your pursuit of an encore career is the website www.encore.org , which offers a plethora of information on the topic. For those in Cincinnati, Inspiring Service can be a very useful source of information. Their Encore Cincinnati program connects adults 50 and over who want to make a difference with social purpose organizations. Their website invites you to explore, opportunities in our community, and provides a list of partners and organizations who might need your help.
Whatever your passion, you can turn it into an encore career providing social and financial rewards in retirement.
Have questions about the tax, legal, and investment related effects of starting your own business?