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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.”

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Anonymous   |     |   Comment #1
Sheryl:  I usually enjoy your articles but what is this "before you even think of retiring".  The reality of today is people don't get a choice about when they want to retire and finding other employment in your 50's can be a nightmare.  My DP was put out to pasture with an entire group of others by his company when he was in his late 50's and could never find fulltime work again.  Why don't you post about how companies find devious ways to "early retire" employees in their 50's just so they won't have to pay them full pensions and give health coverage.  So the "before you even think of retiring" no longer exists with today's companys.  If people don't penny pinch and save everything they can, they may face very grim days in their younger senior years, imo.
Anonymous   |     |   Comment #2
Wow, another pull out of the sleeve article.
There is no longer retirement line time to count on.
Bored to death is not something that happens these days.
There are millions things we can do if we set our mind to do it.
This article is dated to the 50s or 60s, when there was real retirement as per your definition,
however, that no longer exists.
Retirement is just a state of mind, if you have enough money, you can proclaim that you are retired in your 20s. Age has nothing to do with retirement, the money talks.
I know folks in their 80s and still work and I know folks in their 20s already retired.
I;m in between these numbers and do not intend to retire any time soon nor plan to retire at a certain time or money point. Restricting oneself to a cronyism is not something we do these days.
I disagree with you and your article is not either helpful  nor informative to receive a positive vote on your thoughts.
Anonymous   |     |   Comment #3
You quoted someone from the ancient time:
“Get rid of all your debt and pay off your mortgage before you even think about retiring.”

The above no longer apply. If you do what the quote says, you will never have enough money to retire, since the debts can be overwhelming these days. Paying off your mortgage, car, credit cards, line of credits and the other obligations, may put you in the poor house.

And lets assume you did all of that, now you have nothing to deduct on your income taxes and automatically you will pay more in taxes to uncle Sam. Your savings no longer bring income, since you already paid the debt with your nest egg and you already feel poor enough to postpone the retirement, it becomes catch 22 situation and the process will repeat  itself until you realize, there is no such thing as retirement.

The line is blurred and the retirement becomes just a transition in your own mind.
51hh   |     |   Comment #5
Thanks much for all the responding posts, providing a more balanced view on this topic.
Anonymous   |     |   Comment #8
To #3

When filing our federal income tax the automatic deduction for a married couple was  $13,900. (maybe it was a little more because we are seniors). My publication 17 is in the basement. A 100,000 mtg at 4% is only $4000. You would have to have a mtg of over $300,000 before you would even have enough to deduct. You never should be in debt to have a deduction. Most auto loans (unless on a HE loan) cannot be used as a deduction, credit card interest, lines of credit etc can never be used unless somehow it is for a business expense. Filing income tax is very simple for most people. Just read publication 17 to understand it. You can still pay someone to do it or use a tax program but to think that you must be in debt to have a deduction is not a good idea.
Anonymous   |     |   Comment #9
It may be ancient, but it's the best retirement advice ever given:

“Get rid of all your debt and pay off your mortgage before you even think about retiring.”

Paying interest on any outstanding debt adds no value and only serves to accelerate the depletion of any savings and income.
Anonymous   |     |   Comment #10
To Anonymous - #8,

You are wrong, I deduct everything that you negated in you comment and then some.
You have to be smart enough to know how to set yourself to be able to deduct anything including travel expenses and meals.
There are several ways to achieve that, but I’m not allowed in this public forum to explain to you all of how is done nor I’m willing to teach you how for free.
Bozo   |     |   Comment #11
For some, paying off the mortgage makes sense. For others, it does not. It depends, to a great deal, on your estate plan. If you are one of those who recently re-financed at 3.45% fixed, 30 years, and are 65 or over, with children, you might not want to pay off the mortgage. Or, stated differently, your kids would not want you to pay off the mortgage.
Anonymous   |     |   Comment #12
More people went on disability last month than went to work.I believe 89,000 vs

85,000 working.In addition the gov is advertising for takers for food stamps.This

is the change the Communists wanted. 
Anonymous   |     |   Comment #13
No people in the world spend more time talking about & thinking about "retirement" than Americans. Why is that?  Makes one wonder what pleasures must await during retirement. It's not like most or any of you are retiring to Bermuda, is it? 
Bozo   |     |   Comment #14
Having been to Bermuda, actually (it's due East of Charleston, S.C.), I would not recommend it for retirement.
Anonymous   |     |   Comment #15
#14............Bermuda was more a general expression than an actual recommendation, but 'm curious as to why you don't recommend it. I know a couple of guys in their 40's who early retired to Costa Rica & love it there. One who retired to Margarita Island who is thinking of coming it's hard to say sometimes. 
Bozo   |     |   Comment #16
Bermuda is not in the Bahamas, it is a rock in the Atlantic.
Anonymous   |     |   Comment #17
#16.........We all know that. And your point is?
Bozo   |     |   Comment #19
I was trying to explain why Bermuda was not a great place for retirees. It's merely a rock in the Atlantic, due east of Charleston, S.C. It's not in the Bahamas, not terribly warm, and is known for nothing more than shorts. And goose-bumps. By people in Bermuda shorts.
Bozo   |     |   Comment #20
PS: If you head your ship due west from Bermuda, you will not wind up in Charleston harbor. It's called the Gulf Stream. It carries you a tad north.
Anonymous   |     |   Comment #21
#20.........I never said that Bermuda was in the Bahamas. Where do you get this stuff? These are 2 different countries, for God's sake. 

But for my money, Marharita Island is the place. Friendly locals (despite being part of Venezuela), gorgeous females (because it's part of Venezuela), lots of European expats etc etc
Anonymous   |     |   Comment #22
That's Margarita Island
Anonymous   |     |   Comment #23
Fight nice.............KIDs.
Bozo   |     |   Comment #24
You implied Bermuda as a retirement venue. It is merely a stop on the "southern crossing". A place we loaded our fuel bladders (and down-loaded other bladders).
Bozo   |     |   Comment #25
PS: The "Northern Crossing" can be brutal. Ask any mariner.
Anonymous   |     |   Comment #26
I refuse to discuss this further if you're going to talk aboud bladders of any type! :)

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