Baby Boomers are reinventing retirement. Instead of fading into the sunset to enjoy piña coladas by the pool, they’re choosing to work longer—but not at just any job. Many are pursuing second-act or encore careers that combine their passion with a social purpose.
Encore.org says that as many as 9 million people aged 44 to 70 are getting paid for work that balances personal fulfillment and doing good. An additional 31 million in this age group are interested in making the leap into more meaningful encore careers.
A related trend is the increasing number of Baby Boomers who are starting their own businesses rather than retire. A survey by AARP found that 11 percent of workers aged 45 to 74 plan to start a business and 15 percent in this age range are already self-employed. AARP also found that older people are pretty good businessmen and women. Their success rate is high—71 percent are making a profit.
So here are five things you need to think about if you’re considering self-employment or an encore career:
Take a look at the people on the Encore.org website. They’re transforming the lives of prisoners, assisting wounded veterans and helping to eradicate diseases—all really good stuff! But how do they make ends meet?
It doesn’t surprise me that the MetLife Foundation found that 67 percent of those in encore careers experienced gaps in their income during their transition. Fully one-fourth earned no money at all, and 43 percent said they earned “significantly less” than they had in their previous job. Of those who reported little or no income, 79 percent said the gap was six months or longer, and 36 percent said it lasted more than two years. Most (65 percent) said they relied on personal savings to make ends meet.
Based on my experience, I strongly advise anyone who is thinking about self-employment or an encore career to have two years of living expenses in the bank. If you’re married or sharing expenses with a partner or roommate, you probably can reduce that amount. Hopefully, you will not need to draw on your savings too much, but it’s a good insurance policy. It also gives you enough time to fully complete your transition.
I’m into my third year as a self-employed PR practitioner, and for the first time I’m feeling confident about my income potential. So give yourself enough time to succeed. Allow yourself two years, even longer for a business. There’s a reason it’s called a “transition.”
At the same time, do set goals for yourself and your business. Have a plan and review it. If you notice that you’re getting off track, you may need to change course. Either you weren’t realistic in setting the goal, or perhaps you need to make some adjustments in your business or career choice.
Understand, too, that changing careers or starting a business is hard work. Are you willing to put in long days and work weekends to make it happen? Do you have the discipline to stay focused? Make sure you are doing it for the right reasons. Because if your heart isn’t in it, you’re never going to succeed.
3. Learning and networking
Expect to spend a lot of time learning, which can be exciting but also overwhelming. I had never been self-employed before, so everything about managing a solo practice has been brand-new to me. I’ve tried to soak up as much as I can from others, read a lot, and go to workshops and seminars. Transitioning to an encore career may also require you to go back to school or receive special training.
Take advantage of networking opportunities and professional groups that are focused on your business or career area. You’ll meet people who are willing to share lessons learned and give you helpful advice. Look for volunteer opportunities in your encore career field while you’re still working at your regular job. Those opportunities may help you land a paying position.
Starting a new career or business involves a lot of uncertainty. Are you okay with going without a paycheck for a while? Are you willing to abandon your comfortable routine for the unknown? If you are, and you see the possibilities and rewards that come with taking a risk, then maybe you’re ready for the plunge.
Some trepidation is only natural, especially in the beginning when you’re first getting started. But don’t let your fears keep you from doing the things that you’ve dreamed about and made careful plans to achieve. Keep on task. You can do it!
5. The long view
MetLife found that people interested in encore careers plan to work longer, which can boost their lifetime financial security. Having a meaningful job that you want to go to each day helps. You may be giving up some income to pursue your passion, but if you’re happier and willing to work a few more years, aren’t you better off in the long run?
One of the advantages of being self-employed is that it gives you the flexibility to cut back on your hours as you grow older but still stay active in your field. That’s my goal and why I take the long view. If I still like what I’m doing when I’m in my 60s, why shouldn’t I keep working? Heck, Warren Buffett is 83, and he certainly doesn’t need to work. But I bet he likes what he’s doing!
Previous posts you might find helpful:
‘The only thing we have to fear is fear itself’
Dealing with uncertainty
The value of a written plan
8 things you absolutely have to do to make it as an indie
In life, it’s always good to ‘test-drive’ major changes
Hats off to longevity and late bloomers
The ups and downs of a solo career
Accountability groups, success circles and self-discipline
Purpose and entrepreneurship
Extreme career makeover