Ready to work after your primary career ends?

For some, your finances may depend on you working after age 65.

  • Living in Retirement
  • Living in Retirement
  • Living in Retirement
  • Living in Retirement
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Key takeaways

  • Start planning at age 55 for a change of job and lifestyle that you might want to shift to at age 60.
  • Explore possible encore careers 3 to 5 years before you make the move into a new field.
  • Consider working for pay in retirement to help bolster your financial safety net or even your mental health.

Not so long ago, the whole idea of working in retirement1 was not even a consideration for most people. Now, it's a reality.

In contrast to the declining trend of the youth labor force, the number of workers aged 55 years and older in the labor force is projected to grow to 41 million people by 2024, according to the Bureau of Labor Statistics.2 Of those older workers, some 13 million will be age 65 and older by then and still working.

There are many reasons why people continue to work well past their parents' "normal" retirement age. For many, the financial need is real. According to the Fidelity Investments® Retirement Savings Assessment (RSA),3 50% of American households are at risk of not covering essential expenses—like housing, health care, and food—in retirement. Working longer or part-time in retirement can help cover the financial gap.

Even if you have saved enough to retire comfortably, you may find that working for pay in retirement can help provide a safety net. It helps stave off dipping into retirement accounts and may even allow you to keep contributing to retirement savings. The pay can also help provide a cushion so you can delay tapping into Social Security until age 70, which would give you a nearly 8% annual bump in Social Security income versus retiring at your full retirement age (FRA). Additionally, the funds can help cover some of your medical bills not covered by Medicare.

Like other major life changes, transitions to another career don't happen overnight. "Successful career shifters typically set flexible time frames of 3 to 5 years to move into a new field," says Kerry Hannon, a Washington, D.C.-based career expert and author of Great Jobs for Everyone 50+: Finding Work That Keeps You Happy and Healthy... And Pays the Bills. "Finding what you want to do next is a process. You may try out a few things before you find the right path. Start planning at 55 for what you might want to shift to at 60."

In search of an encore career

Some of us are blessed with careers we love, and fortunate enough to be able to continue in them. But many others, especially Baby Boomers, have seen their primary careers come to an end. This has led to the rise in so-called "encore careers" where people pursue new interests, often in service to the community.

According to a 2014 survey from Encore.org, a San Francisco–based "innovation hub that taps the talent of the 50+ population as a force for good," more than 4.5 million Americans aged 50–70 identify themselves as working in encore careers (jobs or volunteer work in a 2nd or 3rd career that is primarily focused on job satisfaction rather than compensation). Another 21 million are considering doing so.4

"We see a surge in encore careers among retiring baby boomers, driven by a desire for a paycheck, a passion, and a purpose," says Marci Alboher, vice president of Encore.org. "Our research shows that purpose, the desire to nurture younger generations, and practices like volunteering have robust positive effects for older adults, including positive outcomes on mental and physical health."

Become a "consultant" in your field as you transition to retirement

If encore careers don't interest you, consider a more traditional approach: becoming a consultant. "One path to getting a job after age 50 is consulting and part-time contract work in one's previous line of work," advises author Kerry Hannon. "Tap into your network. Let people know you're looking for temporary assignments. Your last employer might be a great place to start to look for consulting gigs."

Hannon shares 4 tips on becoming a consultant after your primary career ends.

  1. Become a member of a local industry association or organization. Join industry groups on LinkedIn. Attend industry and professional meetings and conferences. Keep an eye on the association job boards and let other members know you're seeking consulting assignments.
  2. Contact your local Chamber of Commerce to help you reach small businesses in your town. These organizations often don't have funds to hire someone full-time, but may need your expertise and experience. Also check out temporary agencies that specialize in placing experienced professionals in short-term gigs.
  3. Know your rates. Research what other consultants in your field charge. Many consultants have websites where they publish set rates or a range. You might also ask fellow consultants straight out what they charge. Whatever your source, set your rates accordingly based on your experience and skill set.
  4. Market your services to nonprofits which have a mission that resonates with you. They often hire project-based or contract professionals. Consider offering your services pro bono to develop your relationship and gain references for future jobs.

If you are a mid- or late-career worker, it’s not too early to start mapping your next move. But how do you know if working in retirement is right—or even possible—for you? The answer depends on several factors: your age, your health, and your personal goals. Here is a framework to help you begin thinking and planning for how work might fit into your retirement.

Mid-career: If you think you'll need or want to work in retirement, now's a good time to start imagining what you would like to do. Continue in your current job? Launch a business? Volunteer? Alboher says creating an encore career "really begins with getting the time frame right, and recognizing that this is not a retirement job or a bridge job, but is likely to be a whole new phase of your life, and it's not likely to be without bumps in the road, and setbacks." So the earlier you can start planning, the better. Just don't stop saving, because you never know whether you are actually going to be able to work. Read Viewpoints on Fidelity.com: Do your retirement savings measure up?

Preparing for or already in retirement: By this time, you should have a clearer picture of whether you will need or want to work in retirement. Make sure to weigh the pros and cons of leaving your current job. What impact will that have on your retirement savings and health care coverage? Are you emotionally ready to leave? Are there risks you may outstay your welcome at your current job? What other kinds of work might you like to do?

Ideally, before you retire, you should test your plan. "Roll up your sleeves and begin experimenting," says Alboher. "Try on different kinds of roles, whether it's through consulting, or volunteering, or serving on boards. But be as hands-on as possible. Try before you buy. This is very important."

Also, keep in mind that you may have health issues in retirement, or need to provide care for a loved one. This is often the primary reason why many people are forced to retire early or reduce their hours.

Finally, when you do retire, consider taking some time for yourself, if you can afford it, before you jump into your next chapter. "Think of it as a 'gap year' for grownups," says Encore’s Alboher. "Use the time to step back, rest up, and begin experimenting with new options." You've earned it! Some time to recharge and reassess your goals and options will help you in whatever you choose to do next.

Next steps to consider

See ways to combine guaranteed retirement income with flexible income sources.

Get help saving and investing.

See Social Security and tax tips for those working past age 65.

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1. We define retirement as the transition from full-time work in your primary career to any other employment status: not working, working full-time or part-time in an encore career, or working part-time in your primary career. For those who have always worked part-time in their primary career, retirement is the transition from that employment status.
3. Data for the 2018 Fidelity Investments Retirement Savings Assessment were collected through a national online survey of 3,182 working households earning at least $20,000 annually with respondents age 25 to 74, from September 14 through October 3, 2017. All respondents expect to retire at some point and have already started saving for retirement. Data collection was completed by GfK Public Affairs and Corporate Communication using GfK's KnowledgePanel®, a nationally-representative online panel. The responses were benchmarked and weighted against the 2016 Current Population Survey by the Bureau of Labor Statistics. GfK Public Affairs and Corporate Communication is an independent research firm not affiliated with Fidelity Investments. Fidelity Investments was not identified as the survey sponsor.
4. Source: Encore.org, in collaboration with Penn Schoen Berland, conducted an online survey of a representative sample of 1,694 adults aged 50 to 70, in the United States. The survey was conducted February 5–19 and March 19–25, 2014. The margin of error for the general population is ±3.1% at the 95% confidence level, and larger for subgroups.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

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