By now, if you’re a regular reader of the AgingOptions blog, you know that we often stress the importance of preparing oneself mentally for retirement. Too often, especially if you’ve spent decades in the workplace, a sudden transition to “life after work” comes as a shock, even for those who are otherwise well prepared for this new phase of life. Finding a sense of purpose once you step out of the pull of your regular career can be daunting – so how do you do it? How do you prepare for the “Second Act” of your adult life?
A Growing Number of Retirees are Searching for their Second Act
This article that we found on the Kiplinger website a few weeks ago might be a helpful place to start, because it describes what the author, Mary Kane, calls “Six Steps to Finding Your Second Act in Retirement.” Kane writes about a successful Wall Street hedge fund manager who was preparing for retirement at age 67. His kids were grown and he was financially secure – but like many retirees, “he wasn’t ready to step out of the working world for good. He just hadn’t figured out what might come next.” Everything we read suggests that this is an increasingly common phenomenon: men and women may be eager to leave the workplace pressure and routine behind, but they know they still have a lot to give and are desperate to keep on contributing. In the case of the Wall Street retiree, he transitioned into a part-time job with a New York non-profit helping disabled kids. But the specifics aren’t so important – it’s the sense of giving back that counts. “My friends are starting to retire,” this man told Kiplinger, “and I can see the ones who are doing well have some kind of function that gives them a purpose.”
Older Americans do seem to be working longer, partly due to low unemployment which, says the article, “is encouraging employers to reevaluate and retain older workers.” In 1995, according to government figures, about 28 percent of men aged 65-69 were still in the workforce – while today that figure is 39 percent. Rates for older women saw a comparable jump, from 17 percent in 1995 to about 30 percent today. Some are working more years for financial reasons, to delay Social Security, add to savings or stay on a company medical plan. But for others the motivation is emotional and psychological. “After years of building up skills and expertise,” writes Mary Kane, “these baby boomers don’t want to just walk away. They hope to put their talents to use.” The challenge may be to figure out how.
Finding Your Second Act Involves Plenty of Soul-Searching
“Finding a second-act career isn’t easy, even for those with a track record of professional success,” says the Kiplinger article. “You’ll need to do both soul-searching and research first to understand which of your skills are transferable and how they can be useful.” With that in mind, Kane lists what she calls “practical steps to help you prepare for your next stage, whether you decide to volunteer, work part-time, start a business—or do all three.” We don’t have the space here to examine these in detail, but let’s take a brief overview.
- Begin Early. “The best time to start mulling a second career is when you are still working,” the Kiplinger article advises. The key steps can involve preparing a budget for what your “second act” finances might look like, and coordinating the timing of your transition with your spouse to ensure you’re making the right decisions about Social Security and Medicare. The sooner you start to prepare, the better.
- Fix Your Finances. This is where a retirement dashboard prepared by an objective financial planner can be a life-saver. “It’s admirable to have a passion to give back to your community, but make sure you can afford it first,” warns Kiplinger. “One of the worst things you can do is enter a lower-paying second-act career with a load of debt,” so eliminate those credit card and mortgage balances if at all possible. Fortunately, the article implies, if your dream is to start a post-retirement business, technology has made the process far cheaper in many cases, requiring less start-up cash.
- Build a Bridge. If possible, Kiplinger advises, keep working in your old career while launching your new venture. That way you can test the waters without having made an irrevocable decision too hastily.
- Do a Midternship. If you’re drawn to the non-profit world after you retire, maybe you can organize a “dry run” first. “If you think you might need more structure and support to make a change,” the article advises, “look for options through educational institutions and organizations in your community.” One resource is the Encore.org website – an organization whose tagline is “Second Acts for the Greater Good.” Many universities and community colleges also have programs to support older adults looking for new careers and purpose, such as the “midternship” program at the University of Minnesota. Consider various options and resources before launching your second act.
- Tackle the Internal Work. This involves some self-examination as you consider what one retiree called “the spiritual, psychological and sociological ideas regarding the second stage of life.” Volunteering, launching a new career, or starting a business can all be great “second act” adventures, but unless your heart is truly inspired by your new venture, the odds of success are slim.
- Take it Slow. The advice here is pretty straightforward: be patient. “You may need to adjust to the idea that you’re not out to hit a home run on your first try,” one career adviser told “You’ll need to deal with a period of uncertainty and experimentation before settling on your pursuit.” That’s fine. Take the time you need to make the choices that are right for you.
Your Second Act Won’t Succeed Without a Comprehensive Retirement Plan
Maybe the idea of a second act excites you – or maybe you’re too filled with questions about your “first act” as you face retirement. In either case, says Rajiv Nagaich of AgingOptions, we can’t allow fear of the unknown to paralyze us. “No matter how old you are or what your circumstances,” he emphasizes, “a solid retirement plan is the answer. Even if you worry that you aren’t prepared or don’t have enough, a LifePlan can show you the way forward toward a better retirement than you thought possible.” Only a LifePlan from AgingOptions weaves together, not just your financial strategy, but all the essential elements that matter most, including legal, housing, health and family. With a LifePlan prepared, fear of the future can be replaced with confidence and a sense of optimism about the new chapter called “retirement.”
If you’re ready to find out more, we invite you to join Rajiv at an upcoming LifePlanning Seminar – a great way to begin the New Year. To see a calendar of these popular free events, visit our Live Events page and register for the location that works for you. It will be our pleasure to greet you and to share with you and your loved ones the power of an AgingOptions LifePlan. Age on!
(originally reported at www.kiplinger.com)