How to Transition Back to Work in Retirement
You thought you had said goodbye to the 9-5, but for a variety of reasons – your savings didn't go as far as you had hoped, you are now divorced and left with one income, your spouse is ill and you need income to help with medical expenses, or, it could be that you're bored to death – whatever the reason, returning to work in retirement can be quite a transition.
Here's how to return without resentment.
Face the truth
“Get out of denial regarding where you are and where this economy is. It is time to get back to work and create new income. Work is good for you and new income is necessary,” says Grant Cardone, author of If You're Not First You're Last.
“Understand that the goal posts have been moved. Take action. You thought you were set ,but the goal post were moved on you. Quit complaining about it, quit trying to find someone to blame, build new playbook to get yourself in a financial place where you can score again.”
Jump over the hurdles
For sure, the job market still leaves much, much to be desired. But realize your biggest obstacle may be you. “Your mindset is the biggest complication and challenge – not your age nor your body, but your mind. Get your head wrapped around the idea that you are the solution and you are valuable. Disregard all this talk that no one wants to hire older people. There are hundreds of positions in the workplace where you are valuable,” says Cardone.
Indeed, attitude is everything. “People who have an optimistic outlook and exude energy would be more appealing a prospective employer. Try to view the back to work situation as an adventure rather than a chore. Work doesn't have to be drudgery if you love what you do. This can be a second chance,” says Klea Theoharis, regional director at Corporate Valuation Advisors.
Don't let technology intimate you. “The most important element is to brush up on computer skills. Technology is the key to success,” says Jonathan Gassman, director of tax and wealth management at Gassman & Golodny.
Technology can be an invaluable tool in the job search process. When you're looking for a job, there's no getting around networking. “If you don't want to run around, use LinkedIn. Get your profile on LinkedIn and join groups on the site that are appropriate for your experience. You might get some good project work out of this, especially if you combine it with proactive outreach. People are willing to pay for good experience without being tied to an employment contract that includes vacation and sick time. Since your medical coverage may be covered by medicare, health insurance may not be a major issue for you going back to work,” points out Theoharis.
Be your own boss
Then too, maybe you don't want to go back to the corporate world and deal with a boss who is perhaps the age of your grandchildren, or get back to the 9-5 craziness period. There are other options, like self employment where you can control your own destiny. “This would be my plan, especially since older workers going back into the workforce will not likely make the money they were making before they retired. With the Internet and the telephone, this opens up some doors and requires little, if any cash outlay for the start up and sustainability of the business. Social Security is a safety net that will be there,” says Theoharis.
If you can capitalize on past experience as the basis for a new business in retirement, it will strengthen the possibility for success. The time spent looking for a new job at retirement age could be better spent building a business – and could be exciting says Theoharis. “This whole scenarios works best in a service type business or starting a blog and perhaps eventually getting advertisers to sponsor it and generate income.”
Retire for good the next time
Gassman recounts the tale of someone he knows who invested their retirement nest egg with the likes of Madoff.
“This was the money they thought they could live off of from womb to the tomb. Unfortunately they lost all their liquid wealth and that forced the husband to start a private car service in Florida shuttling people back and forth to the airport for $50-100 a pop.” He tries to get enough business to make $250-$500 a day. “He and his wife are in an unfortunate circumstance. What else could he have done? He did not have computer skills. But he liked to drive and it gives him some pride and joy. It's been tough for them. They had to give membership in a golf club, stop going out to eat and paying for their kids' vacations and grandkids' college funding.”
Any number of things can wreck your retirement. For sure though, the next time around you want to say goodbye to the working life and have it stick. How to get it right? “Create new income with the goal of saving 25 percent of it,” says Cardone. He says to put your savings to work in good, safe investments that will benefit from inflation. “The single best investment to do that going forward, will be multi-family apartments. You can get debt on them, get a return on your investment monthly, pay down the debt and create wealth over time due to inflation that is certain to come. If you are not up to the landlord game, then look at stock investments in companies that pay a dividend north of 3 percent and represent products that people must by no matter how bad the economy gets.”
Redo the math. Understanding the main risks of retirement is essential, says Gassman. What tops the list? Health care costs, inflation, market risk and other invaders, he adds. To avoid getting into this situation again, use a retirement calculator periodically to gauge whether you're in good enough financial shape to retire. Says Theoharis, “Get rid of all your debt and pay off your mortgage before you even think about retiring.”