How to plan for a post retirement career
If your vision of the ideal retirement includes an encore career filled with meaningful work, you’re not alone. From starting a business to changing career paths later in life, many retirees choose to stay active and engaged by pursuing fulfilling work. Whether your motivation is to supplement your income, pursue a passion or both, the five tips below can help you make a smooth transition into a post-retirement career.
Five tips for launching a successful second act
1. Identify your goals. Are you going back to work because you need a paycheck? Do you want to stay in your current field but crave a more flexible work arrangement? Perhaps you want to start a dream career you never had a chance to pursue. For inspiration, start by making a list of the things you enjoy doing — then look for ways to turn your passion into profit.
For example, if you love photography or jewelry making, can you sell your wares? If you’re very knowledgeable in an industry that you’re passionate about, would you want to start your own business, invest in one, or consider becoming a consultant or a public speaker?
2. Assess your skills. Take stock of your skills, strengths and accomplishments. Will you be able to use existing skills in your new career or will you need training? Look for inexpensive and time-efficient ways to build any new skills you need, like attending local workshops or classes at a community college. Keep in mind that if you’ve worked for several decades, you’ve already amassed a great deal of experience. Look for career opportunities that complement your expertise as well as your interests.
3. Look for opportunities in your desired field. Identify potential job prospects in your areas of interest and create a realistic timeline for transitioning into your new career. If you’re changing industries, consider volunteering or consulting before you make a full commitment.
4. Leverage your network and other resources.
Reach out to your professional and social networks, and ask others in the industry for advice and guidance. The websites below provide additional resources and information to help you transition into an encore career.
5. Consider the financial implications. Whether you’re pursuing an encore career for passion or paycheck, it’s important to understand how the additional income may impact your finances in retirement, including potential tax and Social Security implications — no matter how much you earn.
For instance, you may be able to delay signing up for Social Security benefits if your income is enough to cover your bills. If you’ve reached full retirement age and are collecting Social Security benefits, there’s no limit on how much you can earn and still receive your full benefit. However, if you’ve started collecting those benefits before your full retirement age, part of your benefit may be temporarily withheld, depending on how much you earn. For more information, visit the Social Security Administration website.
A post-retirement career can also impact your retirement accounts. For instance, you may be able to defer withdrawals on certain retirement plan accounts. You may also be able to make additional catch-up contributions to retirement accounts and qualify for a larger tax deduction. See your tax advisor for details.
Set yourself up for success
It’s a good idea to meet with a financial planner to discuss how a post-retirement career change may impact your finances, and for guidance as you balance your financial and lifestyle goals during an active retirement.
Working later in life can help keep you productive and connected, with the added bonus of supplementing your retirement nest egg. If you’re considering a second career in retirement — or as you approach retirement — Commerce Bank can help. From starting a business to furthering your education, Commerce has the tools to help you succeed. For more information, contact your local Commerce Bank branch to be introduced to a Commerce Brokerage Services1 Financial Advisor.
1 Commerce Brokerage Services, Inc., Member FINRA/SIPC, is a wholly-owned subsidiary of Commerce Bank.