Retirement no longer signals the end of professional life. Instead, it often marks the beginning of a new, more flexible chapter. For many retirees and those approaching retirement, the idea of an “encore career” has gained momentum. Rather than fully stepping away from the workforce, retirees are increasingly choosing to apply their decades of experience in new ways, like consulting, freelancing, teaching or even starting small businesses.
Encore Careers and Emotional and Intellectual Stimulation
An encore career can have multiple purposes in your retirement, whether it’s providing purpose and passion to your days, infusing life with social connection or providing you a little extra income. After years of working within structured roles and routines, many retirees find themselves looking for new ways to stay mentally engaged, socially connected and personally fulfilled. Many retirees return to work in some capacity because they want to stay active and involved, not always because they need the money.
So, what might an encore career look like?
Retirees pursuing encore careers often tap into existing skill sets, allowing them to work smarter rather than harder. For example, a retired executive might consult part-time for startups, or a former teacher might offer tutoring services. Others choose to follow a passion, whether that’s launching an online craft shop, becoming a travel advisor, or volunteering in a professional capacity for nonprofits. The key is that these pursuits often offer flexibility, autonomy, and meaning, elements that may have been less accessible during their primary careers.
Encore Careers Can Bring a Meaningful Financial Boost
In addition to the emotional and intellectual rewards, encore careers can serve as a practical financial strategy. Supplemental income can help reduce the need to draw from retirement savings too early or too heavily, potentially increasing long-term financial stability. For pre-retirees, this opens the door to phased retirement, a gradual shift out of full-time work that allows for better planning and smoother financial transitions.
Considerations Before You Take Your Encore Career
Entering an encore career does come with considerations. Income from freelance or part-time work may affect Social Security benefits, tax obligations, or Medicare premiums, depending on the situation. It’s important to weigh the personal rewards against the financial implications to make informed decisions that align with long-term goals.
Taking Back the Stage in Your Retirement
Retirement today is not a single destination. It’s a spectrum of possibilities. For those who crave structure, creativity or community involvement, an encore career can provide all three. But maximizing the benefits of such a path requires careful planning and financial clarity.
That’s why it’s so important to feel confident about your finances in retirement. Whether you’re considering a passion project, part-time work or launching a new venture, understanding how these choices impact your overall financial plan is key to sustaining the lifestyle you envision. As financial advisors, we can help you evaluate the pros and cons of an encore career and help make a plan that supports both your needs and your aspirations. Reach out to us today to get started.
