After a long and successful career, many of us look forward to retirement with a bucket list in hand and dreams of sailing, sunshine and seashores in our future. However, for some, retirement comes all too soon.
Following retirement, it’s not uncommon for some seniors to realize they’re simply not ready to hang up their hat and kick back. In fact, a recent study commissioned by Financial Planning Standards Council and Credit Canada found that one-in-five seniors say they’re still working past the age of 60.
Some seniors crave intellectual stimulation or want to use their expertise to give back. For others, lack of sufficient income to support a full retirement or to achieve the dreams of their bucket list means a return to the working world.
That’s when an encore career may be just what’s needed to put life back into balance.
However, before hitting the online job sites and sending out résumés, first think about the kind of work you would like to do. For those simply wanting the camaraderie and sense of value they gain in the workplace, money may not be the driving factor.
Even if returning to work is a necessity, endeavor to find something that you enjoy. An encore career is a great time for a fresh start. It’s an opportunity to do something you always wanted to—whether that’s tutoring, caring for kids, dog-walking or working in a library or on a golf course. If you’re having a hard time deciding, consider speaking with a life coach or social worker who has experience working with seniors.
Dr. Colleen Lucas, a registered psychologist with Calgary Career Counselling, offers the following suggestions:
Look at an encore career as the “preferment” stage of life, where you choose the kind of work you would like to do.
Make a list of passions you’d like to follow or a hobby on which you can build. If you enjoy quilting for example, you may enjoy part-time work at a craft store.
Consider your personality. If you’re introverted, working behind the scenes may be a better fit than a sales position.
Give yourself permission to try something new. If doesn’t work out, try something else.
Talk to someone in the job you’re interested in pursuing. You’ll gain a realistic preview and see if it’s right for you.
Jason Heath, a Certified Financial Planner® professional with Objective Financial Partners in Toronto, offers these additional tips that will help you make a financially rewarding transition back into the workforce:
Make a plan: When returning to work for financial reasons, it’s important to determine just how much additional income is needed to reach your goals. Whether the need is to retire credit card debt or pay down a mortgage, save for an annual vacation, cover monthly expenses or make up for pension income lost after the death of a spouse, planning is key.
Full- or part-time: There are both financial and lifestyle considerations when returning to the workforce. Be sure your work is truly fulfilling and that you’re not missing out on family and fun. Look for the sweet-spot when deciding whether to take on a full- or part-time job.
Return on investment: It’s extremely important for those working post-retirement to carefully consider the implications of an encore career. You’ll need to feel confident that your time spent working is worth the money gained when weighed against your other options. If you have a healthy pension or assets, you may see a large part of your government retirement income clawed back if you go back to work. The best way to get a clear picture of the finance side of things is to speak with a CFP® professional, who can help you understand the trade-offs.
Consider tax implications: Income tax is not withheld from CPP and OAS unless an individual requests it. Also, if minimum Registered Retirement Income Fund (RRIF) withdrawals are made, there is no mandatory tax withholding. Part-time jobs may have very little tax withholding and a full-time job may not withhold enough to cover all income being received. If you do decide on an encore career, speak with a CFP professional or tax professional to mitigate the risk of an unexpected and potentially large tax bill come April.
Find a trusted advisor: Returning to work after retirement can be a rewarding and beneficial experience. A CFP professional can act as a sounding board to help navigate the financial implications of your choices. They can also help find additional creative strategies for a financially satisfying retirement. You can find one near you on our Find Your Planner tool
For more on planning for your future, read our 4 part Navigating Retirement series: Navigating retirement: Plan to make the most of every phase, Navigating retirement part 1: Active and less active lifestyle, Navigating retirement part 2: Getting help, and Navigating retirement part 3: Long-term care.
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