6 Steps to Finding Your Second Act in Retirement

Whether you need to work or just want to work after you retire, these moves will help you find the right job.

(Image credit: Getty Images)

After a decades-long Wall Street career, Russell Abbott was ready for a change. He had worked as a hedge fund manager and a director in the fixed income department at Credit Suisse, and the long hours and high intensity took a toll. “You start to age out of financial services,” says Abbott, 67. His two children were grown and he was in a financial position to retire, but he wasn’t ready to step out of the working world for good. He just hadn’t figured out what might come next.

“I felt I still had more to give, and I wanted to brainstorm with people I respected and find out where my perceived wisdom would be of value,” Abbott says. After a few years of exploring an alternative career path—first at a start-up that recruits young executives for nonprofit boards, then through a paid fellowship at a local nonprofit—Abbott found the balance he sought and built an entirely new professional network.

These days Abbott works three days a week as the chief administrative officer for Extreme Kids & Crew, a New York City nonprofit that provides after-school enrichment programs and other activities and support for children with disabilities and their families. He earns well below six figures—nowhere close to his corporate salary—but money is not his primary motivation. He’s using his skills where they are valued, and the additional income is a plus. Abbott can delay taking Social Security until age 70, and he and his wife can still afford the high cost of living in New York City. His flexible schedule allows him to hit the gym five or six days a week and indulge in his passion for reading, something he couldn’t squeeze in during his hectic financial-services career.

“My friends are starting to retire, and I can see the ones who are doing well have some kind of function that gives them a purpose,” Abbott says. “I like the balance I have now between having fun, going to the gym and having that purpose.”

More Americans like Abbott are working well into their “retirement” years. Labor force participation rates for men ages 65 to 69 reached 39% this year, up from 28% in 1995. Rates for older women climbed to 30% from 17%, government figures show.

The low unemployment rate is a factor, encouraging employers to reevaluate and retain older workers, says Chris Farrell, author of Purpose and a Paycheck: Finding Meaning, Money and Happiness in the Second Half of Life (HarperCollins Leadership, $25). More older adults, particularly women, are also turning to entrepreneurship—an underreported trend, says Farrell. Some 26% of all new businesses were started by adults ages 55 to 64 in 2017, up from 15% in 1996.

Even older adults with adequate savings are seeking additional income in retirement, says Matt Rutledge, a research economist with the Center for Retirement Research at Boston College. “Anecdotally, it seems like many older adults are reluctant to tap into their nest eggs,” he says. “They are worried about long-term care and about outliving their savings.” Even a little extra income can boost retirement security. If you earn $20,000 a year working part-time, that’s the equivalent of a 4% annual withdrawal from a $500,000 portfolio.

Older adults like Abbott who are at the end of long careers may also find the traditional image of retirement unappealing. “I love golf, but I can’t play it every day,” Abbott says. And after years of building up skills and expertise, these baby boomers don’t want to just walk away. They hope to put their talents to use.

But finding a second-act career isn’t easy, even for those with a track record of professional success. It requires much more than just announcing your retirement one day and signing on as a volunteer the next. You’ll need to do both soul-searching and research first to understand which of your skills are transferable and how they can be useful. You’ll want to prepare well in advance to shore up your finances, paying off any debts and becoming accustomed to a different standard of living—perhaps living with less income on a trial run for a few months. You may need to mix volunteering with paid work, or find part-time work that will provide health coverage, to ease your transition and the stress on your wallet. And you’ll need to create a new professional network in your community, well beyond the circle of former colleagues and contacts you spent decades establishing in your previous career.

Here are some practical steps to help you prepare for your next stage, whether you decide to volunteer, work part-time, start a business—or do all three.

Mary Kane
Associate Editor, Kiplinger's Retirement Report
Mary Kane is a financial writer and editor who has specialized in covering fringe financial services, such as payday loans and prepaid debit cards. She has written or edited for Reuters, the Washington Post, BillMoyers.com, MSNBC, Scripps Media Center, and more. She also was an Alicia Patterson Fellow, focusing on consumer finance and financial literacy, and a national correspondent for Newhouse Newspapers in Washington, DC. She covered the subprime mortgage crisis for the pathbreaking online site The Washington Independent, and later served as its editor. She is a two-time winner of the Excellence in Financial Journalism Awards sponsored by the New York State Society of Certified Public Accountants. She also is an adjunct professor at Johns Hopkins University, where she teaches a course on journalism and publishing in the digital age. She came to Kiplinger in March 2017.