I think what we’re seeing is a new life pattern that’s geared to much longer lives. That’s going to require a different distribution of work and leisure than one where you load up all of your work in a 30-year period and then get this balloon payment of vacation for 30 years. That’s not financially sustainable. So I think people in the front end of this transformation are fashioning a new stage that splits retirement into two pieces – an encore career followed by full time retirement.
That has the practical benefit of reducing the number of years that you’re retired.
That’s right. They have another act that helps balance their finances and provides additional security as well as meaning.
Do you see financial advisors taking a more active role in helping people shape encore careers?
Financial advisors can provide sophisticated advice about how to plan for this transition period, or how to accommodate a longer working life at what may be a lower salary. We’re also starting to see a lot more creative flexibility from employers. AARP, for example, lists of the 50 best employers every year who are engaged in flexible practices that are really well suited for people at this stage of life.
You know, we hear about heroic transformations where one day you’re working in a bank and the next day you’re opening up a vineyard without ever breaking a sweat. It doesn’t really work like that. It takes work and planning. The good news is that most of the people that I’ve seen who found their footing in this stage of life found deep fulfillment doing something that really draws on their mid-life experience.
For more on Marc Freedman and Encore careers, go to Encore.org.
Chip Castille, Managing Director, is head of the BlackRock US Retirement Group. You can find more of his posts here.