Retire Well

Better test-drive that encore career if you want to work while in retirement

How to boost your retirement income with odd jobs

If your retirement plans include an encore career, look before you leap.

Half of employees say they expect to work at least part-time while in retirement, according to a Transamerica Center for Retirement Studies survey of 4,161 workers from earlier this year.

Continuing to work is a necessity for some, who need the income or health benefits. (See chart below.) For others, retirement is a chance for a career pivot, said Catherine Collinson, the center's president.

"We asked people how they dream of spending their retirement," she said. "What was very surprising was, 28 percent referenced some form of work."

A career shift in — or just ahead of — retirement can be a good thing, said Matt Rutledge, a research economist at Boston College's Center for Retirement Research.

Forthcoming analysis from the center found that a career shift in your 50s could help you stay in the workforce longer, ultimately improving your prospects for a financially secure retirement, he said. You might also be able to find work that's less stressful or physically strenuous, or that you're more passionate about.

But make sure that leaving your current 9-to-5 job in pursuit of an encore career won't hurt your retirement prospects. Only 21 percent of workers are "very confident" about having enough money to retire, according to a 2016 report from the Employee Benefit Research Institute. Another 42 percent are somewhat confident.

The older you are, the tougher it can be to recover financially from a new career that doesn't pan out, said Transamerica's Collinson. (Think lost investments in an entrepreneurial endeavor, missed retirement contributions or the risk you'll be at least temporarily unemployed.)

"Run your own personal numbers to determine when and how you can afford to take that leap," she said.

Look for opportunities to take your second act for a test-drive while you're still in your current job, said Rutledge. Volunteer, or dabble in that passion project as a part-time side job to get a better sense of whether the reality of the work matches up with your dream.

"With the gig economy, you have the ability to taste-test a bit," he said.

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