Retirement planning can best be described as managing the transition from your primary career to an agenda of your choosing. Unfortunately, it is becoming increasingly rare to work in one job or field until retirement. Frequently, primary careers are not sustainable until age 65 and many are finding themselves displaced for various reasons. This edition of “The Road to Retirement” will examine second careers as an important “bridge” in the transition to full retirement.
By the time someone reaches about age 45, they should be fairly well established in their primary career. With over twenty years work experience in a specific field, he or she may be approaching their peak earnings potential. The student loans have been paid off, a chunk of savings should have been accumulated and, hopefully, your health is good. Life is good but retirement planning or, specifically, career management is needed.
Mergers, divestitures, restructurings, business failures and economic twists can leave anyone without a job five to twenty years short of their planned retirement age. In some cases, the displaced worker is quickly rehired into a position similar to the one lost. Some are even fortunate in finding an even better opportunity. However, many experience difficulties in the job market due to a changing demand for skills, age and compensation constraints. Corporations, in particular, have a silent age bias as younger, less expensive and less experienced candidates are the preferred hires.
The loss of your primary career well before your planned retirement age can be distressing. You still need to accumulate retirement savings, pay college costs and the thought of health care costs can turn you gray. However, the stress will start to ease as you stop mourning the loss of your primary career, assess your skills and passions toplan for the future. In fact, you should be thinking about your career even as you experience success with your primary career
A secondary career might be related to your primary career. I consider my current position as a Certified Financial Planner to be a second career after working in the Treasury Department at a global investment bank. Despite extensive financial experience, a lot of training was required to make the transition. Many second careers fall into an entirely different field such as a fireman becoming an electrician or a pharmaceutical salesperson becoming a basketball coach. Consulting and teaching jobs are naturals for second careers.
While you are experiencing success in your primary career there are several questions that you should be asking yourself:
1) “Is my current career and/or position sustainable?” If you work for a corporation going through layoffs and reorganizations you may have your answer. If you are “Blockbuster” with “Netflix” approaching, you have your answer. You need an honest appraisal of your current circumstances with a view forward. Even a moderate concern should lead to more questioning.
2) “What are my skill sets and what are my passions?” Skill sets can entail finance, technology, management, sales and/or the ability to interact with others. If you are passionate about your skill sets you will able to apply them in a second career.
3) “What can I expect to be paid and are there benefits?” Second careers frequently entail lower levels of compensation. The good news is that you may still be able to bridge yourself to retirement if you have adequate savings and limited or no mortgage and college expenses. Health care benefits alone can make the difference.
4) “Should I redefine my concept of work?” More often than not second careers are found outside corporate American. Commuting to an office is replaced by working from home as technology brings a degree of independence.
There is a final word of caution with regards to second careers: be careful of capital intensive opportunities. Franchises, restaurants and other start-up businesses require capital or some form of seed money. You do not want to cannibalize retirement funds to launch a second career. “The most common way to make a small fortune in the restaurant business is to start with a large fortune”.
Important Disclosures: The information, analysis, and opinions expressed herein are for general and educational purposes only. This article is not a substitute for personalized advice from AEPG Wealth Strategies and nothing contained in this presentation is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. This information is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions.
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