5 Expert-Approved Tips To Guide You Through A Late-Stage Career Transition

 

So, you’re nearing retirement and want to make an impact before leaving. 

It’s almost like when music artists are asked to come back on stage after an electric performance for one last hurrah. Sounds like you’re gearing up for an “encore” career!  

Maybe you’ve been looking forward to retirement and hoping that you’ll finally be able to relax and do whatever you want. But many people retire only to discover boredom that is unbearable and unfulfilling. 

The good news is that you can do things differently! You can make an impact! You can enjoy an encore career where you love what you do, make a difference, and achieve financial freedom. All you need is some focus and a solid savings plan. And these tips will give you a plan that will work! 

You may wonder if you’ll ever be able to stop working so much and still be secure about your finances. You may not be sure about changing your career while you still have a family to take care of. But this is where your savings plan comes in! With the help of a good plan, you can regain control of your money and make it work for you instead of worrying about what’s next.       

These 5 savings tips will help you make a plan and be confident in transitioning to your encore career.

Tip # 1: Understand Your Why 

You are now motivated to end your long-term career. This is where you have invested "your day in and day out" for many years. Whether in one or many technical areas, you've given your all and then some. 

So, what is motivating you to consider an encore career? Are you in a job that you don't enjoy? Do you want to do more for others? Do you want to slow down and not work so many hours? 

An encore career - the job you will take up while moving toward or in retirement - is your next step. How can you get out of this job you hate and still pay your bills? How can you do something in your retirement years that will make an impact? At this point, you're probably trying to imagine how you can actually move forward and do what you want.

The first step is to understand why you want to do what you want to do and make a plan to do it. What is your "why"? Write it down, think about it, dream big, adjust it, and make it your own! Why do you REALLY want to transition into your encore career? Understanding that is what will keep you going as you make this transition!

James and Deanna discovered this as they started working with their financial coach. They were planning James' transition to his encore career. When they understood their motivation, they made the change confidently. It was easier to leave the security of a long-term career because they understood their "why": that cabin in the woods that they wanted to build in their retirement years. This encore career was going to be fulfilling to James while impacting others. And it allowed them to save for their dream! 

 

 

Tip # 2: Make a Spending Plan and Stick To It

Now that you understand your “why”, the next step is to make a plan. Do you currently prepare a written spending plan each month before the month begins? If you do, great! If not, now is an excellent time to start!

A written spending plan is the key to building wealth in any phase of your life. It is a must when preparing to transition from your long-term career to your encore career. 

If you still need to do so, prepare a written spending plan for your current situation and expenses. This should include only your current income. You will decide how you will use each dollar of income each month. Then make sure you are sticking to the plan and making it work.

Now that you have that ready, prepare a projected spending plan for your encore career. Using your estimated income, decide how you will use each dollar. Then, determine if your income in your encore career will be enough to do what you want to do.

Jane took this first step when she started working with her financial coach. She had built a successful business but had never prepared a personal spending plan. She needed to put this in place before she could step away from the business and spend more time with her family.

And if you’ve never made a spending plan before and are looking for some guidance on getting started, reach out to an Accountable-accredited coach to get an expert’s help.

 

Tip # 3: Get Out of Debt for Good 

According to CNBC, in 2019, the average American had $90,460 in debt. Those nearing their encore career, the “GenXers” (ages 40-55) had an average of $135,841. 

If you’re the average American with $90k in debt, this limits what you can do. If you’re the average “GenXer” American with $136k in debt, you may not be able to transition into an encore career that will give you the joy and peace you’re looking for. 

But, it’s not the end of the road because you can absolutely change that! Using a spending plan (tip #2), you can get out of debt for good and then move to your encore career. While this may seem like a mountain to climb, it is worth all the work. 

Before starting to work with a financial coach, Edward and Felicia thought they could continue living in debt. They did not seem to care that they had over $100k in consumer debt - not including their $400k mortgage debt. As their financial coach helped them work through those knots, they realized that their plan not to pay off debt was not a plan that would not provide success for the long-term.

So, if you've got debt looming over you right now, now’s the time to start taking the proper steps so you can get out of debt and transition to your encore career before it is too late!

 

Tip # 4: Set Up An Emergency Fund and a Launch Fund  

Do you want to know how long it will be until you can quit your long-term career job? 

Do you know how much money you'll need to transition to your encore career? 

Do you want to be sure you will have enough to quit your long-term career and start your encore career?

You've probably heard of an emergency fund before. And if you're wondering, yes, you need one even in retirement. And while transitioning from your long-term to your encore career, you also need a launch fund.

An emergency fund is a specific amount of money you have set aside for unexpected roadblocks. Grandma called it a rainy-day fund! You always need an emergency fund, whether you have debt or no debt. You may have heard differing opinions on how much you should have. Typically, it is suggested that you have 3 to 6 months of necessary expenses set aside for unexpected things that are going to happen. A financial coach can guide you in deciding how much you should have in your emergency fund. 

Now that you are planning to transition to an encore career, you will also want to have a launch fund. This is money to cover your expenses while building your new career. How much you need in your launch fund depends on many things. If you are transitioning to opening your own business, you will need more than if you transition into an encore career with a steady paycheck. You may be able to have less if you have substantial funds in your retirement accounts or if you will collect Social Security. Again, your financial coach can help you decide what that amount is for you.

This is what Chris and Ada did when Chris wanted to transition to his encore career and start his own business. They were out of debt but still needed to make a spending plan. They worked with their financial coach to determine how much they needed to have in their emergency and launch funds. Then, Chris and Ada could confidently enter this next step together.

 

Tip # 5: Test-Drive Your Idea First

Starting an encore career comes with many “whats” and “hows”.

Maybe you’re dreaming of leaving your long-term career but wondering what to do to make that happen.

Maybe you’re thinking about how to earn money while continuing to work in your long-term career.

Or maybe, you’re just not 100% sure if you will like your chosen encore career.

Your next step should be to consider working part-time in your chosen encore career. You can start small by working a few hours outside of your regular job. Not only does this get you extra income for your savings plan, but it also allows you to be realistic about whether you will enjoy your new career. Remember that you will need to work an extra job if you still have debt or haven’t saved enough before ending your long-term career. If you do not do this, you cannot transition to your encore career and continue living the way you want. 

That is what happened to Frederick and Maria. They felt they had a good plan, and Frederick ended his long-term career without trying out an encore career. When they reached out to a financial coach, they realized they needed to do things differently for this choice to be sustainable. They were too young to collect Social Security and had to take a partial pension payment. Their financial coach was able to help them refocus and take control. They made a plan. Frederick was able to start his encore career and continue to work on their plan to save more.

If you’ve not decided what to do in your encore career, you may want to do more research or take a career assessment. This is where the guidance of an expert can help you make good choices about what you want for your future!

 

Transitioning From Your Long-Term Career To A New Career Later In Life

You are excited about transitioning from your long-term career to your encore career! This is a fabulous time full of endless possibilities. But you need a savings plan to make it happen!

Be sure to understand your why. It is going to motivate you!

Make a spending plan and stick to it. This is the tool that is going to get you where you want to go.

Get out of debt - for good! That debt is holding you back from an encore career, making an impact, and enjoying your work.

Set up your emergency fund and launch fund. It is your insurance to get you through this transition.

Test-drive your idea before committing 100%. You can do this by working part-time in your encore career and continuing full-time in your long-term career. You will build a good foundation by doing it this way.

And if you want the help of an expert as you move through this transition and find joy in a new career, connect with an Accountable-accredited coach by booking a FREE 30-minute Coach-Match session! 

This is a simple no-obligation call that’ll help you get a better idea of whether coaching is something you need. And if you do choose to move ahead, this call will help us connect you with an Accountable-accredited coach who will fit your needs and help you make this transition with confidence! 

Click here to book a call!

 

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About the Author

Kim Eldred is a Certified Public Accountant and Master Financial Coach with a master’s degree in accounting. 

In her long-term career, she had over 35 years of experience helping businesses and individuals manage money and build wealth. After she and her husband worked together to get out of debt, she made a plan and transitioned to her own encore career. She now specializes in helping professionals make a plan for their money and discover financial freedom. She enjoys guiding others to transition from their long-term career to their encore career. 

Learn more about Kim here.