What baby boomers need to know to create a successful second career
A Realistic Second Career for Retirees
by Gary Foreman
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Will you want to create a second career in retirement? You won't be alone if you do. It's estimated that 10,000 baby boomers reach retirement age every day. And with life expectancies of 20 or more years, many are choosing to stay in the workforce by finding a second career for themselves.
To help us understand what it takes to be successful in a second career, we contacted John Tarnoff. John has vast experience helping people reinvent themselves for second careers. He's also blogs at JohnTarnoff.com.
Q: What constitutes a good basis for a second career?
Mr. Tarnoff: One of the most important things that Boomers can do when pivoting to an encore career is consider the meaning and purpose that they're going to get out of it. At this stage in our lives, we shouldn't underestimate our need to find something to do that is not just earning us income, but doing so in a way that makes us feel good about getting up in the morning and making a positive impact.
Q: Many second retirement careers are based on being self-employed. What does a lifelong employee need to know before taking the plunge?
Mr. Tarnoff: Today's business world is more entrepreneurial, and Boomers need to get on board with that mindset. We have to be prepared to be more self-reliant, more strategic, and to think more critically. If we've been in corporate for most of our careers, we need to think more independently and to remember that we are providing value to clients, not taking directions from a supervisor.
Q: Many second career dreams include untried or untested ideas. How can a retiree evaluate their chances of success as a first step in their new career?
Mr. Tarnoff: It is important to manage risk. While dreams are great, we need to be careful not to dream too big. This is true at any age. Hopefully, the advantage we have being older is that we've seen enough and experienced enough to have a clearer sense of what could work versus what can't work either for us personally or in the market. We have to test and research our ideas, of course, like in any venture, and the world is set up for us to more easily do that research than ever before (e.g. Google, Wikipedia, etc.). We have to beware, though, of single-mindedly trying to fulfill a life-long dream. The same rules apply: just because it was a good idea 20 years ago doesn't mean it's a good idea today. We have to test and research and make sure that it is viable before we commit and launch.
Q: Are there ways to finance a second career without jeopardizing needed retirement savings?
Mr. Tarnoff: Starting a business today is easier and cheaper than ever before. It's a "DIY" world, with tremendous free/low cost tools and resources to handle legal, administrative, development, sales and marketing functions. Everything is digital, so Boomer entrepreneurs have to use digital and online tools as the basis for their business.
Beyond the DIY resources, many people are funding small business startups using crowdfunding. A new coffee shop just opened up around the corner from me two months ago. The young woman who started it had been working at another coffee house across town and wanted to open her own business closer to her home. She raised about $25,000 on Indiegogo, promoted her launch on social media, and the place has been packed since she opened. That's just one illustration. I do think it is important to avoid dipping into retirement funds if at all possible and to be wary of "sure-thing" providers who claim to be able to set you up in a new business.
Q: Some second careers require additional education. What opportunities do retirees have to acquire that education?
Mr. Tarnoff: Going back to school is actually a treat at this age. Educational opportunities are all around us, and there is no need to feel intimidated or concerned about going back to school for a degree or a certification. There are also many online options, but I have to say, as someone who went back to school after age 50 to get a Master's degree, I loved being in class with younger people. It was stimulating and invigorating. Getting back into a student mindset is also a great way to open our eyes, and to reset the clock. I really recommend it.
Q: Are there certain types of second careers that are more likely to be successful? Or others that are less likely to succeed?
Mr. Tarnoff: I think it gets back to the first question. If it has purpose and meaning for us, then we should pursue it. But we should also do our homework and make sure that the idea is viable and that it fits our needs and requirements (income potential, hours, location, resources, etc.). Understanding our market is critical. If we can't come up with an elevator pitch that everyone is enthusiastic about, we need to keep working on it. Many Boomers are turning to franchise businesses as a good way to just jump in. There is an investment required, and not all franchisors are as supportive as others, so you want to make sure your franchisor really has your back and won't leave you dangling. People also get involved in MLM businesses.
In either case, make sure to research the businesses thoroughly and talk with current (and former) buyers to make sure everything is on the up-and-up.
John Tarnoff is a career reinvention coach, speaker, and author who focuses on supporting his fellow Baby Boomers in pivoting to extended and reinvented careers beyond traditional retirement. He spent nearly 30 years as a Los Angeles-based film producer, studio executive, and tech entrepreneur before reinventing his own career at age 50, and going back to school to earn a M.A. in counseling psychology. Ironically, his reinvention brought him back to entertainment where he served as Head of Show Development for DreamWorks Animation from 2003-2009, developing their in-house artistic training program and founding their college recruiting program. Since 2010, he has been co-running a Los Angeles-based graduate program for Carnegie Mellon University and consulting in the education field. He is the author of the forthcoming book Boomer Reinvention: How to Create Your Dream Career After 50. He also blogs at JohnTarnoff.com.
Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com. Gary shares his philosophy of money here. You can follow Gary on Twitter or visit Gary Foreman on Google+. Gary is also available for audio, video or print interviews. For more info see his media page.
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