MONEY Careers

A Good Reason to Tap Your Roth IRA Early

Concentrating surgeons performing operation in operating room
Alamy

You shouldn't always wait until you retire to pull money from your retirement account.

The Roth IRA is a great tool for retirement savings. But here’s something not as well-known: It’s great for developing your career as well.

Many of my young clients in their 20s and 30s struggle to balance current spending, saving for the next 10 years, and stowing away money for retirement. With so many life changes to deal with (weddings, home purchases, children, new jobs), their financial environment is anything but stable. And their retirement will look completely different than it does for today’s retirees.

To my clients, separating themselves from their current cash flow for the next 30 years feels like sentencing their innocent income to a long prison term.

They ask, “Why should we save our hard-earned money for retirement when we have no idea what our financial circumstances will be in 15 years, never mind 30? What if we want to go back to school or pay for additional training to improve our careers? We might also decide to start a business. How can we plan for these potential life changes and still be responsible about our future?”

The answers to those questions are simple. Start investing in a Roth IRA — the earlier you do it, the better.

There is a stigma that says anyone who touches retirement money before retirement is making a mistake, but this is what we call blanket advice: Although it’s safe and may be correct for many people, each situation is different.

The Roth IRA has very unique features that allow it to be used as a flexible tool for specific life stages.

Unlike contributions to a traditional IRA, which are locked up except for certain circumstances, money that you add to a Roth IRA can be removed at any time. Yes, it’s true. The contributions themselves can be taken out of the account and used for anything at all at any time in your life with no penalty. And, like the traditional IRA, you can also take a distribution of the earnings in the account without penalty for certain reasons, one of which is paying for higher education for you or a family member. (Some fine print: You’ll pay a penalty on withdrawing a contribution that was a rollover from a traditional IRA within the past five years. And you’ll have to pay ordinary income taxes on an early Roth IRA withdrawal for higher education.)

Although you shouldn’t pull money from your retirement account for just any reason, sometimes it’s a smart move.

Let’s say you graduate from college and choose a job based on your major. This first job is great and helps you get your feet wet in the professional world. You’re able to gain some valuable real-world experience and support yourself while you enjoy life after school. And this works for a while…until one day, 10 or 15 years into this career, you wake up and begin to question your choices.

You wonder if this career trajectory is truly putting you where you want to be in life. You think about changing careers or starting a business, but you need your income and have no real savings outside of your retirement accounts.

Now, let’s also say that you were tipped off to the magic of a Roth IRA while you were in college and you contributed to the account each year for the past 15 years. You have $75,000 sitting in the account, $66,000 of which are your yearly contributions from 2000 through 2014. It’s for retirement, though, so you can’t touch it, right? Well, this may be the perfect time to do so.

I recently spoke to a someone who did just this. Actually, his wife did it, but he was part of the decisionmaking process.

The wife has been working for years as a massage therapist for the husband’s company. Things were going quite well, but she had other ideas for her future. She wanted to go back to school to get her degree as a Certified Registered Nurse Anesthetist. The challenge was that this education was going to cost $30,000, and they did not have that kind of money saved.

So, they brainstormed the various options, one being to tap into his Roth IRA money. They determined that this would be a good investment for their future. Once the wife became a CRNA, her annual earnings would rise an estimated $20,000 — money they could easily use to recoup the Roth IRA withdrawal (though the 2015 Roth IRA contribution limit is $5,500 for those under 50 years old).

This decision gave them a sense of freedom. The flexibility of the Roth allowed them to choose an unconventional funding option for their future and gave the couple a new level of satisfaction in their lives.

And, that’s what it’s all about. We have one life to live, and it’s our responsibility to make decisions that will help us live happily today, while still maintaining responsibility for tomorrow.

Whether your savings is in a bank account or a retirement account, it’s your money. Although many advisers will tell you otherwise, you need to make decisions based on what is best for you at various stages of your life. The one-size-fits-all rule just doesn’t work when it come to financial planning. There is no need to rule out a possible solution because society says it’s a mistake.

———-

Eric Roberge, CFP, is the founder of Beyond Your Hammock, where he works virtually with professionals in their 20s and 30s, helping them use money as a tool to live a life they love. Through personalized coaching, Eric helps clients organize their finances, set goals, and invest for the future.

MONEY Second Career

Is the Boomer Entrepreneur Boom Fading?

Boomers are aging out of the "entrepreneurship sweet spot." But their impact on the industry will stay strong.

Entrepreneurs are the lifeblood of the economy and the boom in boomer startups has been a major pumping force. But the State of Entrepreneurship 2015 report released today by the Kauffman Foundation, which specializes in studying and promoting entrepreneurship, suggests that the boomer binge just may be winding down.

Or maybe not.

Reasons for Concern

More broadly, the Kauffman report finds that the state of entrepreneurship in America (and prospects for its future) represent a case of on the one hand and on the other hand and cites “reasons for concern.”

On the one hand, notes Kauffman, entrepreneurship is thriving by some measures.

Digital entrepreneurs are feverishly creating new products and services, from social media to the shared economy. The media celebrates their achievements and investors eagerly snap up their initial public offerings. Venture capitalists and angel investors are flush with money, trolling for the next big thing; the report notes that CB Insights counted 588 companies in its Tech IPO Pipeline for this year.

On the other hand, the longer-term trend is disheartening, a tale of declining dynamism. New business creation hit a recent high in 2006, yet by 2012 the numbers were still running 27% below the previous peak. Business survival rates for new firms have been declining since the 1990s. So have the job-generating figures at new establishments.

Cloudy Magic 8 Ball

And Kauffman’s Magic 8 Ball for boomer entrepreneurship looks cloudy.

On the plus side: Its researchers say boomers have been, and will continue to be, an entrepreneurial generation. As they work longer and live longer, boomers will be entrepreneurs for longer periods. And boomer founders will be the ones to capitalize on the challenges and opportunities of their own aging generation. Said the report: “…we can expect the boomers to continue to be an important economic force for many years” and “boost American entrepreneurship.”

On the minus side, Kauffman says: Since boomers — now age 51 to 69 — have aged out of the sweet spot for entrepreneurship (around 40), they won’t start as many new companies as in recent years and the companies they start will have less economic impact. (See the chart below showing the recent decline of entrepreneurial activity for Americans age 55 to 64.) “Common sense indicates that an older population won’t start new companies at a very fast pace,” the report noted.

In addition, Kauffman said, many boomers can’t afford to start new companies, because they were hit hard by the Great Recession, and businesses started by older entrepreneurs have lower levels of employment and lower rates of employment growth.

Mixed Signals for Millennials

Kauffman also scrutinized the entrepreneurial outlook for millennials, who came of age as the IT revolution flourished, and similarly came away with a mixture of optimism and pessimism.

Since millennials (in their 20s and 30s) came of age as the IT revolution flourished, they’re well positioned to turn new technologies into entrepreneurial ventures, Kauffman said. They’re also well-educated, which equates to the creation of stronger businesses, and are on the cusp of mass entry into the peak age bracket for entrepreneurship — in fact, they’ll be the largest cohort at those ages in American history.

The report noted: “It does not seem outlandish — keeping in mind that demography is not deterministic — to expect that a giant group of people in this age group will help revitalize rates of entrepreneurship.”

But, Kauffman said, millennials are saddled with student loan debt and were also hard hit by the recession, so many can’t afford to be entrepreneurs. “There is growing worry over how entrepreneurial the Millennial generation will be,” the Kauffman report said.

Why I’m Bullish About Boomer Entrepreneurs

Personally, I’m bullish about boomer entrepreneurs, particularly in their Unretirement (the topic and title of my new book) and am making that case at a Washington, D.C. event today that Kauffman is holding to release its report. I’m also bullish about entrepreneurship in America overall.

The way I see things, as I’ll be saying:

The generation that has made a bigger mark on American history than any other will continue to do so even as they age. Boomers are reimagining the last third of life and many boomers will have the ability and the desire to continue working during the traditional retirement years. A series of broad, mutually reinforcing changes in the U.S. economy and society are turning an aging population into more of an economic asset than before. Boomers are well educated and healthier than previous generations. An information-and-services dominated economy is easing the transition to longer work lives. Toiling away on a computer in a medical clinic in the 2000s is far less demanding than working the assembly line in the 1950s.

The household economics of Unretirement are compelling. Earning even a slim part-time income allows older workers to keep saving or to push off the day they have to tap into their retirement savings. For some boomers, their encore job may be full-time, but for the majority their next act is likely to embrace the flexibility that comes from part-time jobs, contract work and temp employment. Thanks to aging boomers, the U.S. will also enjoy a striking resurgence in entrepreneurship, not in spite of an aging population but because of older boomers. They’re realizing that Unretirement offers a new opportunity to start a business, especially since age discrimination is much less of a factor.

Why I’m Optimistic About Entrepreneurship Overall

And here are two more reasons I’m optimistic about prospects for entrepreneurship in America in general.

First, Millennials have made a huge long-term investment — measured in college tuition, fees and loans — in their human capital. Those student loans will pay off with time and my guess is that a surprising number of Millennials will join the ranks of entrepreneurs, perhaps going into business with their boomer parents.

Second, immigration. America’s high-tech economy has prospered largely thanks to highly educated foreigners. A quarter of our engineering and tech firms started between 1995 and 2005 had at least one founder who was foreign-born, according to scholars Vivek Wadhwa, Annalee Saxenian, Ben Rissing, and Gary Gereffi. In Silicon Valley, the percentage of immigrant founded startups reached 52% of total new companies over the same time period.

It isn’t just highly educated foreigners who are entrepreneurs, either. Immigrants have created businessesfrom the corner grocer to the local builder that create jobs and revitalize neighborhoods throughout the country. The record waves of immigration over the past quarter century, and immigration in the future, is a key factor that should nourish entrepreneurship.

One Suggestion That Could Help

The Kauffman Foundation is asking researchers and others to explore the issues its report raised and offer recommendations. I have one: Create a universal, portable retirement plan program for all workers.

Only 42% of private sector workers age 25 to 64 have any pension coverage in their current job. The result is that more than one-third of households end up with no coverage during their working years, while others moving in and out of coverage accumulate small 401(k) balances. Retirement savings provides an additional financial cushion for those experimenting during their Unretirement years. Broadening coverage could be a huge boost for them and for American entrepreneurship.

Chris Farrell is senior economics contributor for American Public Media’s Marketplace and author of the forthcoming Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community, and The Good Life. He writes about Unretirement twice a month, focusing on the personal finance and entrepreneurial start-up implications and the lessons people learn as they search for meaning and income. Tell him about your experiences so he can address your questions in future columns. Send your queries to him at cfarrell@mpr.org. His twitter address is @cfarrellecon.

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Secrets of Successful Small Business Owners

MONEY Second Act

How This Woman Turned a Layoff Into a $3 Million Business

150209_CA_secondact_1
Sarah Wilson

After being let go from her retailing job, Heidi Rasmussen joined her husband to launch the health discount card freshbenies.

At age 15, Heidi Rasmussen began working in retailing, at the same department store where her stepfather put in 35 years. After eight years in store management and 12 years in corporate, Rasmussen had reached the rank of divisional vice president by 2012. Then, while she was out for a memorial service, she found out over the phone that she’d been let go—one of hundreds downsized that day. “Many people were just devastated,” says the now 46-year-old. “But that’s not my outlook. I’m always thinking, There’s something better.”

It took her a week to find it. Her husband, Reid, had already left his job as manager at an insurance agency to launch a business. His idea: Get insurers to offer workers discounts on expenses like prescriptions and urgent care. Struggling to get his concept off the ground, he appealed to his wife to apply her marketing brain. “I decided to transform the idea into an engaging brand,” she says. “It was a total step of faith.”

Working at full stride, Rasmussen came up with a card that bundles 10% to 60% discounts on vision and dental care with 24/7 phone consults with doctors and help with billing errors.

Employers who buy cards for their workers (typically $8.50 a pop) make up 90% of the business. Both the companies and their workers—who often get cards paired with high-deductible health plans—can save if an employee’s call to a doctor heads off an office visit. Likewise, pinpointing billing errors pays off for everyone.

Then she tested the pitch with 30 women she knew (women are behind 80% of family benefit decisions, she says). The group vetoed the name “concierge card” because “it sounded too hoity-toity.” Freshbenies’ original spokescharacter was blond, but Rasmussen made a switch to brunette after the group reacted negatively. And she learned that $12 was the most they could charge for their direct-to-consumer card.

Rasmussen expects freshbenies to bring in $3.5 million in 2014, up from $1.3 million in 2013. While the couple left higher-paying jobs, “that looks like a small tradeoff for the opportunity to work together on something that we love.”

By the Numbers

$82,000: how much savings they tapped to launch. That amounted to about 55% of her severance. About $25,000 went to a consulting firm that advised them to pitch to HR managers—a total bust. They had more success reaching out to insurance brokers who set up employer benefits.

2 years: how long they could have gone with no income. For their personal expenses, which came to $8,000 a month, they relied on the $350,000 they had saved, leaving their 401(k)s alone. “We were already very frugal and living below our means,” says Rasmussen, who lives in McKinney, Texas.

2016: when she hopes to triple revenues. In two years, Rasmussen expects freshbenies to bring in $12 million a year. The company is adding at least a dozen insurance brokers as clients every month. “Now that I’m starting to get in front of some really big brokerages,” she says, “I know they are going to want to work with us.”

MONEY Second Career

Why You’ll Be Able to Work Longer Than You Think

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Klaus Tiedg/Getty Images/Blend Images

Innovations in technology, medicine and workplace design will allow more boomers to work well into retirement.

As I go around the country talking to people about my book Unretirement and its thesis (that today, retirement often includes part-time work, often with a purpose), I frequently hear people say: “I don’t think I’ll be able to work in retirement.”

They’d like to stay employed, they say, but that’s an unrealistic expectation considering the accumulated ravages of time and increased infirmities. I think that, in many cases, they’re being pessimistic.

Medical advancements (including ones we’ve yet to see) and workplace-design innovations at growing numbers of employers are making it easier to work into your 60s and 70s, albeit not for everyone.

Boomers Coping With Maladies at Work

Now, I’m no Pollyanna about aging. To be sure, getting up from my office chair is a slow maneuver these days, typically accompanied by a groan or two (maybe three). My knees were never good, but it takes longer for them to recover after a business flight. And I realize that plenty of leading-edge boomers are coping with some combination of maladies on the job—fading eyesight and hearing, maybe a limp, a bad back, arthritic hands.

That said, the assumption of widespread work-denying disability is greatly exaggerated. According to the Centers for Disease Control and Prevention, 76% of people 65 and over rated their health as good, very good, or excellent. What’s more, the disability rate for people 65 and over dropped from 35% in 1992 to 29% in 2009, notes Steven Wallace, professor at the UCLA School for Public Health.

At the workplace, smart design, technological advances and organizational accommodation have done quite a bit to address physical issues faced by older workers.

Reconfiguring the Office Computer

John Smith, 55, appreciates how technology has helped him stay employed. Born with cerebral palsy, Smith works part-time evaluating websites and education programs for the Institute on Community Integration at the University of Minnesota, whose mission is bringing people with all kinds of disabilities into the community.

Smith worked there full-time before his life-changing accident a decade ago, when he fell and badly injured his spinal cord; he’s now confined to a wheelchair. His employer lets him use a trackball rather than a mouse to navigate his computer and the computer has software features built into Microsoft Windows that take into account his difficulties with the keyboard. Smith’s power wheelchair lets him raise his seat to be almost on eye-level when speaking to someone standing up.

“I have no doubt that technology is going to keep getting better and will allow me to increase my productivity for many years to come,” says Smith.

“One of the last bastions of widespread discrimination is the belief that to be disabled means being unable to work,” says Marca Bristo, 62, President and Chief Executive Officer of Access Living, a Chicago-based nonprofit that provides housing, in-home assistance, advocacy and other services for the disabled. In 1977, she broke her neck diving into Lake Michigan and became paralyzed from the chest down. “Most people can work, even those with severe disabilities,” she says.

Case in point: Kate Williams, 72, program manager for employment immersion at the Lighthouse for the Blind and Visually Impaired in San Francisco. Though blind due to a rare degenerative disorder, Williams trains and mentors people for jobs in finance, industry, government, nonprofits and other sectors of the economy. Adaptive technologies like Braille-enabled computers and voice recognition software (think Siri) help Willliams’ clients in many tasks.

“I think there is a job for everyone,” she says. “You just have to go after it.” Williams was awarded a 2014 Purpose Prize by the social venture Encore.org.

Hip Surgeries and Driverless Cars

The march of technology is making the formerly impossible now possible for many older workers. Advances in hip and knee replacement surgery already let them remain productive and active. (The idea for this column came from walking through the skyway with a colleague who casually mentioned that he had both his hips replaced. I never knew.)

David Lindeman, Director of the Center for Technology and Aging at the University of California, Berkeley, believes the coming-soon driverless car will have a dramatic impact on how people think about disabilities and prospects for employment. “For everyone with mobility limitations it will be a game changer,” he says.

Unretirement skeptics shouldn’t underestimate the power of good design—specifically “universal design”—for stretching out work lives, too. The universal design movement takes into account aging in the office with specially-created, utilitarian and aesthetically pleasing door handles, lighting and work surface heights.

The approach is an integral part of the corporate campus of office design and furniture maker Herman Miller in Zeeland, Mich. There, the doors have levers rather than knobs, because levers are are easier on aging hands. Desk drawers have easy-grip pulls.

Here’s the thing: Smart ergonomics isn’t just useful for older or disabled workers. “Whether it is chronic aging or acute injury, whatever we do to accommodate those particular situations, they’re going to be useful for everyone,” says Gretchen Gscheidle, director of insight and exploration at Herman Miller.

Will Employers Meet the Challenge?

Of course, technology and smart design only succeed at extending work lives if organizations embrace them. Companies like Walgreen, AMC and Hershey stand out for their concerted efforts to recruit workers with disabilities.

One question other employers need to answer: Will they hire and hang onto employees like Smith, Williams and Bristo?

Bristo sometimes gets frustrated at the slow pace of change. Her husband reminds her during those moments: “Just wait until the baby boomers get older.” That’s when change will speed up, he tells her, as employers realize they need the skill and experience of their older workers.

Yes, some older workers deal with more disabilities than others. That doesn’t mean they should be excluded from Unretirement—far from it.

Chris Farrell is senior economics contributor for American Public Media’s Marketplace and author of the new book Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community, and The Good Life. He writes twice a month about the personal finance and entrepreneurial start-up implications of Unretirement, and the lessons people learn as they search for meaning and income. Send your queries to him at cfarrell@mpr.org or @cfarrellecon on Twitter.

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MONEY Second Career

Why Elite Colleges Are Targeting Baby Boomers for New Career Programs

Stanford college
Linda A. Cicero—Stanford News

Harvard and Stanford have launched programs for high-level execs seeking to change careers. Other universities are looking to jump in.

Stanford University welcomed 25 unusual students onto its campus this month—all in their 50s and 60s.

They are the inaugural fellows of a new program, the Distinguished Careers Institute (DCI), designed for people who want to follow more than one career path in their lifetimes and who want to go back to a college setting for more training. It is the forefront of a new movement for universities to look beyond typical 19-year-old undergraduates.

“People are finding that their initial careers might last 20 or 30 years, and then they need to prepare for new work that might last another couple decades,” says Dr.Philip Pizzo, the founder of the program and a pioneering oncologist who is a former dean of Stanford’s School of Medicine.

DCI is similar to a Harvard University’s Advanced Learning Initiative, launched in 2009. Both are one-year programs that focus on elite “C-suite” leaders looking to transform the second half of their careers, and both are expensive. DCI costs $60,000, not including housing; tuition and other costs of the Harvard program are similar.

Pizzo, who just turned 70, arguably is launching his own next act with the institute after a distinguished career in medicine that includes stints at the National Institutes of Health and Harvard University.

He is hoping to start something of a movement. Pizzo says he will start talking with other university leaders later this year about what Stanford is learning at DCI and encourage others to embrace its principles.

“We’re an elite program, but not elitist,” he says.

Another group, the non-profit San Francisco-based group’s “EncoreU” initiative is pushing universities to focus on older students making career changes, and it will convene a group of college presidents this fall to talk about how to make it happen.

LIFE ON CAMPUS

Jere Brooks King is a typical mid-career education fellow. She enrolled in Stanford’s DCI program after a 35-year career in sales and marketing roles at high technology companies, punctuated by early retirement from Cisco in 2011 at age 55. She turned 59 just before DCI’s kick-off this month.

King, who has served on the boards of several non-profits and industry associations, is using the DCI fellowship to expand her knowledge of board governance. She hopes to apply that expertise working with entrepreneurial start-ups focused on technology and social innovation.

“It’s really exciting to explore the latest thinking on campus around the connection between technology and social innovation,” she says. “I’m getting the chance to hear from venture capitalists interested in social innovation, and see what students are doing with their own ventures.”

DCI fellows pick an area of academic focus from nine areas, ranging from arts and humanities to engineering, healthcare or social sciences. They also participate in weekly discussion seminars and intergenerational mentoring and leadership sessions.

What kind of reaction are the DCI fellows getting from Stanford undergraduates?

“We think we fit right in, and we’ve been welcomed warmly,” says King. “But I’m sure we stand out, because we all look like someone’s parent—or grandparent.”

Read next: How to Jump from a Second Career to a Dream Encore Job

MONEY Second Career

Why the New Boomerang Workers Are Rehired Retirees

hand holding boomerang
Dragan Nikolic—iStock

How to go back to work in retirement where you had a full-time job.

You’ve no doubt heard about boomerang kids who return to their parents’ homes in their 20s (maybe you have one). But there’s a growing group of boomerangers who are typically in their 60s: retirees who return to work part-time or on a contract basis at the same employers where they formerly had full-time jobs.

If you’ll be looking for work during retirement, you might want to consider avoiding a job search and becoming one.

Employers That Rehire Their Retirees

A handful of employers have formal programs to rehire their retirees. The one at Aerospace Corp., which provides technical analysis and assessments for national security and commercial space programs, is called Retiree Casual. The company’s roughly 3,700 employees are mostly engineers, scientists and technicians, and Aerospace is glad to bring back some who’ve retired.

“With all the knowledge these people have, we get to call on them for their expertise,” says Charlotte Lazar-Morrison, vice president of human resources at Aerospace, which is based in El Secundo, Calif. “The casuals are part of our culture.”

The roughly 300 Aerospace casuals (love that term, don’t you?) can work up to 1,000 hours a year and don’t accrue any more benefits (the company’s retirees already get health insurance). Most earn the salary they did before, pro-rated to their part-time status, of course.

Why Aerospace Corp. Brings Back ‘Casuals’

The “casuals” program lets Aerospace management have a kind of just-in-time staffing system. “It allows us to us to keep people at the ready when we need them,” says Lazar-Morrison.

Ronald Thompson joined Aerospace’s casuals in 2002, after retiring at age 64. He’d worked for the company full-time since 1964, in program management, system engineering, system integration and test and operations support to the Department of Defense. “It’s a really good way to transition to retirement,” he says. “You need both the physical and mental stimulation to keep you young.”

Thompson worked up to the 1,000-hour limit for the first couple of years. Now that he’s in his mid-70s, he’s cutting back to about 10 hours a week, mostly mentoring younger Aerospace employees. I asked Thompson when he planned to stop working. “I guess my measure is when people won’t listen to me anymore,” he laughed. “That will happen.”

At MITRE Corporation, a not-for-profit that operates research and development centers sponsored by the federal government, about 400 of its 7,400 employees are in an optional, flexible “part-time-on-call” phased retirement program. These part-timers can withdraw money from MITRE’s retirement plan while they’re working.

Why Some Employers Don’t Have Rehiring Programs

Why don’t most employers do what Aerospace and MITRE do?

For one thing, it takes a considerable investment in resources to set up a program for former retirees. So the ones who can most afford it are those with skilled workforces who offer customers specialized knowledge.

For another, some employers are wary of getting trapped by complex labor and tax rules. For example, the Internal Revenue Service generally requires firms with retirement plans to delay rehiring retirees for at least six months after they’ve left.

But benefits experts believe boomeranging can make a lot of sense for retirees and the employers where they had worked full-time.

“I think this is really logical away to go back to work, so there is a lot of potential growth if it is made easy,” says Anna Rappaport, a half-century Fellow of the Society of Actuaries and head of her own firm, Anna Rappaport Consulting. “The legal issues need to be clarified and made easy.”

Outsourcing to Bring Retirees In

A growing number of companies are outsourcing the task to bring in some of their retirees. The independent consulting firm YourEncore, created by Procter & Gamble and Eli Lilly, acts as a matchmaker between corporations looking for experts to parachute in and handle pressing problems and skilled “unretirees” wanting an occasional challenge and part-time income. YourEncore has more than 8,000 experts in its network; 65 percent with advanced degrees.

Blue Cross/Blue Shield of America’s “Blue Bring Back” program lets managers request a retired former employee if there’s a project or temporary assignment requiring someone who knows the company’s culture and procedures. Kelly Outsourcing and Consulting Group manages the program.

Tim Driver, head of RetirementJobs.com, plans on getting into the business of making it easier for employers to re-employ their retirees. His research shows that this type of program works best for companies needing ready access to talent with unique, hard-to-find skills and flexible schedules, such as insurance claims adjusters. When a storm hits, Driver says, insurers need to quickly dispatch trained property-damage adjusters who are knowledgeable about their claims processes and policies.

“It’s an attractive approach for companies that want to have people accessible but not on their books [as full-time employees],” he says.

The option of participating in an formal outsourcing arrangement is likely to grow with the aging of the baby boom population and their embrace of Unretirement. In the meantime, this kind of work deal “will be mostly ad hoc,” says David Delong, president of the consulting firm Smart Workforce Strategies.

How to Get Yourself Retired in Retirement

How can you get a part-time gig with your former employer when you retire?

Delong recommends broaching the topic while you’re still on the job. (My dad always used to say that six months after you leave an employer, people start forgetting you; they’ve moved on and have figured out how to get along without you.)

“Raise the idea with the boss,” says Delong. “Don’t assume they wouldn’t be interested in having you back part-time. The worst they can do is say, ‘no.’”

Taking a job with your former employer in your Unretirement can be a win-win situation for you and your once-and-future boss. After all, you have the knowledge and the skills to do the job well and the employer knows who you are and what you can do.

I suspect this kind of boomerang arrangement will become a bigger slice of a boomer movement toward flexible, part-time work in retirement.

Chris Farrell is senior economics contributor for American Public Media’s Marketplace and author of the new book Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community, and The Good Life. He writes twice a month about the personal finance and entrepreneurial start-up implications of Unretirement, and the lessons people learn as they search for meaning and income. Send your queries to him at cfarrell@mpr.org or @cfarrellecon on Twitter.

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MONEY second careers

How to Tap into Your Creativity to Build a Second Career

JamesRicePhotography.com Jazz guitarist Bucky Pizzarelli, 89, at left, with Ed Laub, 62.

Who says innovation peaks in your 20s? Some artists reach their prime in their 50s, 60s, 70s, and 80s.

When we lived in Bremerhaven, Germany in the early 1960s, my younger sister and I eagerly shared the Little House series of books by Laura Ingalls Wilder. The first one, Little House in the Big Woods, was published when the author was 65.

For the 50th anniversary of his class of 1825 at Bowdoin College, Henry Wadsworth Longfellow wrote a poem (Morituri Salutamus) which ran through a list of giants who did great work late in life—Cato, who learned Greek at 80, Chaucer, who penned The Canterbury Tales at 60, and Goethe, who completed Faust when “80 years were past.” Longfellow, then 68, exhorted his aging classmates to not lie down and fade. No, “something remains for us to do or dare,” he said.

For age is opportunity no less
Than youth itself, though in another dress,
And as the evening twilight fades away
The sky is filled with stars, invisible by day.

The assumption that creativity and gray hair is an oxymoron is a widely held stereotype. What’s more, the notion that creativity declines with age is deeply rooted, but it’s also deeply wrong. Anecdotal and scholarly evidence shows overwhelming that creativity doesn’t fade with age—or at least it doesn’t have to.

Launching Innovative Second Careers

University of Chicago economist David Galenson has taken a systematic look into the relationship between aging and innovation, discovering that many famous artists were at their creative best in their 60s, 70s and even 80s.

Galenson’s favorite example: artist Paul Cézanne, who died at 67 in 1906. Cézanne was always experimenting, always pushing his art, never satisfied. Thanks to his creative restlessness, the paintings of his last few years “would come to be considered his greatest contribution and would directly influence every important artistic development of the next generation,” wrote Galenson in Old Masters and Young Geniuses: The Two Life Cycles of Artistic Creativity.

The same holds for many others, including Matisse, Twain and Hitchcock.

“Every time we see a young person do something extraordinary, we say, ‘That’s a genius,’” Galenson remarked in an interview with Encore.org, a nonprofit helping people 50+ launch second acts for for the greater good. “Every time we see an old person do something extraordinary we say, ‘Isn’t that remarkable?’ Nobody had noticed how many of those old exceptions there are and how much they have in common.”

One of those “remarkable” people is Ed Laub, 62, a seven-string guitarist in New Jersey who plays with famed jazz guitarist Bucky Pizzarelli, 89. (Pizzarelli’s bass player is 95.) I caught up with Laub after a weekend gig in St. Louis and Denver and before the group took off to play in Miami.

Playing guitar is a second career for Laub. His grandfather was a founder of Allied Van Lines and Laub worked for some three decades in the business, alongside his father.

Laub started taking lessons from Pizzarelli when he was 16. When he neared 50, Laub realized that what he really wanted to do was play guitar full-time. His parents had passed away, so he sold the business in 2003 and began teaming up with Pizzarelli. They now perform about 100 times a year in all kinds of venues—auditoriums, jazz clubs, private parties and a regular gig at Shanghai Jazz, a Chinese restaurant/jazz club in Madison, N.J.

Laub told he me has used his business acumen to boost their pay. “What I found out is many creative types have no idea how to manage a business,” he said. “No matter how creative you are, if you do it for a living, it’s a business.”

Boomers Taking Career Risks

My suspicion is the old-aren’t-creative stereotype is a major factor behind the rise in self-employment among boomers. Many people in their 50s and 60s are eager to break away from their jobs if management won’t give them the opportunity to exercise their creative muscles.

Barbara Goldstein, 65, of San Jose, Calif., gets her creative juices flowing by promoting artists. She’s an independent consultant focused on public art planning with clients including the California cities of Pasadena and Palo Alto. “I have as many ideas, if not more, than I did in my 20s and 30s,” she said. “What happens over time is you learn things and you become much more effective in the work you do.”

Goldstein noted that with age, you realize if you want to get something done, you have to go for it—there’s no point in waiting because time is precious. To further broaden her horizons, Goldstein is a fellow at the Stanford Distinguished Careers Institute, a new, one-year program helping older professionals think through the next stage of their lives.

“If you’re always doing the same thing it’s hard to be creative,” she says. (Incidentally, if you know someone 60 or older who’s just now doing great encore career work, nominate him or her for Encore.org’s 2015 Purpose Prize.)

Economists Joseph Quinn of Boston College, Kevin Cahill of Analysis Group and Michael Giandrea of the Bureau of Labor Statistics have found a sizable jump in recent years in the percentage of people who are self-employed in their 50s and 60s. “Older workers exhibit a great deal of flexibility in their work decisions and appear willing to take on substantial risks later in life,” they wrote. And, I’d add, they’re creative.

What can you do to stay creative in your Unretirement years?

  • Don’t isolate yourself. Be willing to engage with people from diverse backgrounds and of different ages, as Goldstein does.
  • Try something new, experiment, take a leap. That’s what Laub did, going from moving van boss to professional guitarist.
  • Go back to school to pick up new skills.
  • And when someone disparages older people for their lack of creativity, tell them about Cezanne and Matisse.

With time, the Unretirement movement will demolish yet one more stereotype holding people back.

Chris Farrell is senior economics contributor for American Public Media’s Marketplace and author of the new book Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community, and The Good Life. He writes twice a month about the personal finance and entrepreneurial start-up implications of Unretirement, and the lessons people learn as they search for meaning and income. Send your queries to him at cfarrell@mpr.org or @cfarrellecon on Twitter.

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Still Working After 75—and Loving It

Singer Willie Nelson performs during an “In Performance at the White House” series event
Jacquelyn Martin—AP One of many working seniors, singer Willie Nelson, 81, is still on the road.

Growing numbers of Americans in their 70s and 80s love their jobs and have no plans to retire. You might be one of them someday.

Willie Nelson is 81; Warren Buffett is 84; Mary Higgins Clark is 86 and David Hockney is 77. All are still working and going strong. So are more and more Americans 75 and older. You might be one of them someday—and glad of it.

In a recent interview, British painter David Hockney—one of the world’s greatest living artists—captured the joy, meaning and youthfulness he continues to draw from his profession. “When I’m working, I feel like Picasso, I feel I’m 30,” he told Tim Lewis of The London Observer. “When I stop I know I’m not, but when I paint, I stand up for six hours a day and yeah, I feel I’m 30.”

‘It’s What I Enjoy Doing’

I imagine that sentiment rings true for Mark Paper, age 81. He’s President of Lewis Bolt & Nut Company in Wayzata, Minn., a firm owned by his family since 1927. Paper took the helm from his father in 1962 and remains deeply involved in the company’s expanding operations. He gets daily and weekly reports, stays in touch with its executives and flies out to visit the manufacturing plant in La Junta, Colo. several times a month.

“Why not stop working?” I asked Paper. “You have money. You’re 81 years old. Haven’t you heard of retirement?” His answer: “It’s what I enjoy doing.”

Plenty of other septuagenarians and octogenarians feel the same way.

Although people working at age 75 and over are a distinct minority—comprising less than 1% of the total labor force—roughly 11% of American men 75 and older are still at it and 5% of women that age are. By contrast, in 1992, only about 7% of 75+ men and 3% of 75+ women worked.

Indeed, after declining sharply in the early postwar decades, the average age of retirement in America has risen over the past two decades, to 64 for men and 62 for women, calculates Alicia Munnell, head of the Center for Retirement Research at Boston College.

While the labor force participation rate for men 75 and up is currently about double that of the rate for women, the gap is expected to shrink. Boomer and Gen X women are well educated and more attached to their jobs than previous generations.

‘I Can’t Imagine Not Being Employed’

Marilyn Tully, 75, loves working, too. She has been self-employed her entire working life in businesses mostly revolving around the home and interior design. “I can’t imagine not being employed,” she says. “Especially if you still have the energy, which I do and, like me, you have the creative urge.”

That doesn’t mean there haven’t been rough patches. In 2007, she and her husband had to shutter their Naples, Fla. furniture business, a casualty of the housing market implosion, and her interior design company suffered. These days, her design business is picking up, she represents a successful jewelry designer and consults on inventory management for high-end designers. (Her husband handles the administrative and IT sides of her firms.) When they aren’t working, they sail Florida’s gulf coast for two weeks at a time on the trimaran Tully’s husband built. “It’s a good life,” she says.

‘It Keeps Me Young’

Newspaper publisher Jerry Bellune of Lexington, S.C., 77, works at a pace that would leave many younger workers gasping. He says running the Lexington County Chronicle & Dispatch News with his wife, MacLeod, offers him “enjoyment, exhilaration, a strong sense of mission and purpose.” On top of that, says Bellune, “it keeps me young, working with younger people and helping them grow personally and professionally.”

And he has no plans to stop. “I’d like to work as long as I’m able and can still make a contribution,” Bellune told me.

Here’s a typical workweek for him: Mondays and Tuesdays, he’s usually at the office, writing, proofing pages and talking with the staff about coverage, and the rest of the week he’s mostly writing and helping with community endeavors. Weekends are busy, too, writing weekly and monthly articles for a business magazine and two trade magazines. (He’s also a consultant and manages a family investment fund. Tired yet?)

The Bellunes do take breaks, traveling abroad several weeks a year and spending time at their vacation home. “We have an excellent staff that permits us that leisure,” he says.

‘It Keeps Me Off the Streets’

Funeral assistant Jerry Beddow, 75, loves working, too. A year after retiring as a high school principal in 1994, Beddow began his current job at Patton-Schad Funeral and Cremation Services in Sauk Centre, Minn. He works about three to four hours a day, helping position caskets at the funeral home, carrying flowers, talking to grieving families and driving the hearse. “It keeps me off the streets,” he laughs.

After researching my new book, Unretirement, I’ve come to believe that the ranks of people 75+ earning a paycheck will expand in coming decades, especially among better educated employees and businesss owners. It isn’t inconceivable that the average retirement age when the youngest boomers reach their 70s in the early 2030s could approach 70.

“Public opinion in the aggregate may decree that the average person becomes old at age 68, but you won’t get too far trying to convince people that age that the threshold applies to them,” notes Pew Research in its report, Growing Old in America: Expectations vs. Reality. “Even among those who are 75 and older, just 35% say they feel old.”

The ones who are able to keep working well into their 70s, I think, will find themselves leading richer lives, both financially and psychically.

Chris Farrell is senior economics contributor for American Public Media’s Marketplace and author of the new book Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community, and The Good Life. He writes about Unretirement twice a month, focusing on the personal finance and entrepreneurial start-up implications and the lessons people learn as they search for meaning and income. Send your queries to him at cfarrell@mpr.org. His twitter address is @cfarrellecon.

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Ranger with snowmobile, Yellowstone National Park, Wyoming.
Blickwinkel—Alamy Ranger with snowmobile, Yellowstone National Park, Wyoming.

These retirees found a way to spend all their time on pursuits they love.

“Damn the submarine. We’re the men of the Merchant Marine!” That singsong phrase woke me up every morning for seven months on my first ship, the SS San Francisco. I went to sea after graduating from college. For four years, I worked on ships, mostly tankers, steaming through the Suez and Panama canals, past the Rock of Gibraltar at midnight under a full moon, stopping in ports like Athens, Dubai, and Yokosuka. A number of my peers had similar adventures after college, including leading wilderness trips, tending bar, teaching English overseas and traveling around Europe picking up odd jobs. Ah, those were adventurous days before the desire for a career and family responsibilities took over.

Peter Millon is living the adventure, too—in his Unretirement, at age 69. Last year, he spent about 70 days skiing the slopes in Park City, Utah, when he wasn’t working four days a week for ‎Rennstall World Class Ski Preparation, repairing skis and waxing skis for racers. Essentially, he split his retirement time 50/50: working half-time and pursuing his passion the other half. In the off-season, Millon plays golf with his oldest son who lives in Salt Lake, fishes and takes target practice. Not bad.

Leading a Wealthy Life

A wealthy industrialist? A Wall Street master of the universe? A high-tech titan of business? Hardly. Millon isn’t wealthy, but he leads a wealthy life. “Do something you love, something for you,” he says. “Don’t do it for anyone else.”

Millon began his career working at a small ski maker in St. Peter, Minn. He then spent decades as a technical director at Salomon North America and its various competitors. During the real estate bubble years, Millon was selling high end appliances for the home, living in a townhouse in Massachusetts. Business tanked when the bubble burst, and he took advantage of an early retirement package. Three years ago, he sold the townhouse and moved to Utah where he was known in the ski community, picking up a condo on the cheap. These days, Millon lives comfortably off Social Security, some investments and the income from his part-time job.

The ‘World’s Oldest Intern’

John Kerr is living the 50/50 life in his Unretirement, too, working as park ranger in Yellowstone between May and September. He didn’t plan on becoming a ranger, though. Kerr had a four-decade career at WGBH as a marketing and fund raising executive, retiring at 65. “It took the shock of the change to rattle my bones a bit,” says John Kerr. “I had way too much energy and experience to sit around.”

His exploration took him out to Jackson Hole, Wyo., where Kerr has a small condo. While walking around Bozeman, Mont., he saw a sign for the Yellowstone National Foundation, which supports Yellowstone National Park. He walked in unannounced and from an off-hand remark during a conversation with the organization’s head, he learned it had an internship opening. Kerr applied and for the next year he was “world’s oldest intern,” talking to visitors about wolves.

Kerr became a Yellowstone ranger five months a year for the next nine years, living close to Jackson in the winters and using his time off to visit family. Now 76, he recently moved back to New England to be near family. Still, he expects next season he’ll return to Yellowstone. “It has been a great adventure,” he says.

Advice for Your Unretirement

When I asked Kerr and Millon what advice they’d give to others in their 60s and 70s eager for adventure, Kerr emphasized the importance of an open mind. “You have to have your eyes open and your ears flapping,” he chuckled. Millon suggested drawing on the relationships you’ve made over the years and the skills you’ve developed without trying to compete for the kind of job you had earlier in your career.

What I took away from both men is that the financial penalty of working fewer hours and doing more of what you love can be much less than you might think.

“The key is that when your interests align with your work, there is nothing from which to retire,” says Ross Levin, a certified financial planner and head of Accredited Investors in Edina, Minn. “We save money to ultimately create a lifestyle. If that lifestyle doesn’t need much money, then we need to save less.”

Think of it this way, says Levin: You earn $10,000 a year in your fulfilling work on a ski slope or in national park or down in the Florida Keys. That’s the equivalent of having $250,000 in investment assets, assuming the 4% withdrawal rule (a standard guideline for safely taking money out of retirement savings). A $20,000 income is the equivalent of $500,000 in assets, and so on.

Much of the conversation about prospects in the traditional retirement years often forgets how creative people are at coming up with solutions. Many Unretirees I’ve interviewed over the years have found they made significant cuts in expenses without slashing their standard of living.

So, if your career didn’t leave you with the kind of portfolio that pushes you into the ranks of the wealthy, that doesn’t mean you can’t construct a comparable lifestyle. The question is: What’s your adventure?

Chris Farrell is senior economics contributor for American Public Media’s Marketplace and author of the new book Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community, and The Good Life. He writes about Unretirement twice a month, focusing on the personal finance and entrepreneurial start-up implications and the lessons people learn as they search for meaning and income. Tell him about your experiences so he can address your questions in future columns. Send your queries to him at cfarrell@mpr.org. His twitter address is @cfarrellecon.

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These prize-winning social entrepreneurs built non-profits that make a difference.

“You must do the thing you cannot do,” Eleanor Roosevelt once wrote. It’s the only way to overcome the fears we all face in doing something new, she thought, and take a leap into the unknown.

Kate Williams quoted Roosevelt earlier this week here when she accepted a $25,000 Purpose Prize, one of the awards given annually by Encore.org, a San Francisco-based nonprofit that works to engage baby boomers in “encore careers” with a social impact. The awards, now in their ninth year, recognize trailblazers over age 60 who have tackled social problems creatively and effectively. Cash prizes range from $25,000 to $100,000.

Williams, 72, lost her eyesight to a rare degenerative disease after a long career as a corporate human resources professional. She overcame her own fears, first by moving away from friends and family in Southern California to start over in San Francisco and later by starting an employment training program for the blind. Today, she runs a similar, larger program for the national non-profit organization Lighthouse for the Blind.

Encore.org’s mission is to promote a game-changing idea: Greater longevity and the graying of America present opportunities, not problems. This year’s Purpose Prize winners underscore that point. They’re rock stars in the world of social entrepreneurship, having started organizations that work on issues like sex trafficking, disaster relief, autism and education in impoverished neighborhoods.

The idea of second careers with social purpose has broad appeal. Millions of older Americans want to stay engaged and work longer, sometimes out of economic need but often out of a deep motivation to give back. An Encore.org survey this year found that 55% of Americans view their later years as a time to use their experience and skills to make a difference, though just 28% say they are ready to make it happen.

Many people have trouble figuring out where to start—which brings us back to Roosevelt. Fear of the unknown is a key hurdle in starting down a new path later in life, and I had the chance to ask some of the encore experts gathered for the awards about how they would advise others seeking to begin.

The juices get flowing when people connect their experiences and knowledge with a problem they are passionate about. But first they have to make the leap.

“I had been in the corporate world, not part of the blind community,” Williams says. “I was frightened, but what I thought would be overwhelming turned out to be a beautiful thing. As soon as we started our training classes, I was hooked.”

Accurate, real-time salaries for thousands of careers.

The Lighthouse for the Blind program has worked with 100 blind job seekers over the past three years, and has placed 40% of them.

David Campbell, winner of a $100,000 prize this year, wanted to help after the Indian Ocean tsunami that devastated parts of Southeast Asia in 2004. A senior executive at several software and Internet technology companies, he figured he could help by creating a Web-based tool to organize volunteer tsunami relief efforts. That led him to start All Hands Volunteers, which has worked on 45 disaster relief projects in six countries and dozens of U.S. locations. The non-profit uses the Internet to route volunteers to places where they can be put to work effectively.

“People just want to know that if they go, they’ll have a place to sleep that won’t be a burden to the local people, and a contact to start with,” he says. “We give you exact instructions on how to get there, and assure that you’ll have a bunk bed, food and someone will have organized work and that you’ll have the right tools to be productive.”

Campbell talks often with people looking to get started on encores. “I always advise people to start by volunteering with some organization with social purpose – it’s an easy, great way to start. But the question many people have is, ‘Which one, and what might I do?’ ”

Campbell suggests people consider geography and the focus of the work. “Do you want to work locally, nationally or internationally? Do you care about health, education or some other thing? That starts the conversation and helps people narrow it down.”

Then, he says, visit a non-profit that interests you, and take the time to understand its needs.

“Be willing to help understand the mission, and do whatever it is they need help with. And don’t treat volunteering as a casual activity. You need to commit to a certain number of hours of work a week as though it were a paying job, and take responsibility for it.”

To paraphrase another famous Roosevelt, the only thing you have to fear is fear itself.

Related:

Can I afford to retire?

Should I work in retirement?

Does working affect my Social Security benefits?

 

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