Episode Summary

In today’s episode, we’re going to talk about doing retirement as an encore career. Many people wrongly assume that they have to be a 9 to 5er until they are a 65er. There are options to an “early retirement” but maybe defined a little differently than what you’ve thought of before.

Key Points

  • Early retirement doesn’t mean you have to have millions in the bank
  • Early retirement doesn’t mean you have to disconnect from meaningful work
  • Understand why you need to mind the gap when planning your encore career with an early retirement
  • Learn why it’s critical to understand the detail of your spending


Hear from Jon Harris about his story to the path of early retirement while still engaging in meaningful work.

Additional episodes that will put you on the path to mastering your finances so you have the opportunity to make work optional.


Welcome to Agile Finance Radio. I’m your host Jason Stump and our goal is to help you win with money, gain at life, and retire with confidence. Today on Agile Finance Radio we’re going to talk about doing retirement as an encore career. Many people wrongly assume that they have to be a 9 to 5er until they are a 65er. There are options to an "early retirement" but maybe defined a little differently than what you’ve thought of in the past.

Retire but Work?

Let’s start off by explaining what I mean by doing retirement as an encore career. If you’ve listened to my podcast for a while you know that I’m not a fan of the word retirement. It just doesn’t resonate with me the way a typical retirement is portrayed with people spending a life of leisure. To me, that isn’t a healthy lifestyle. Don’t get me wrong I want to take the time to pause and enjoy things in life, but there’s more important things than living a life of leisure.

What I mean by an encore career in retirement is being able to work on my own terms and not someone else setting those terms for me. It’s truly doing the work that you enjoy that has purpose for you that aligns with your values. This work might be paid or unpaid but might be less than your normal full-time work that you have now.

A lot of my audience have salaries or income that are in the six figures. Especially if you are one of my business owners or the ones working in the technology industry, which is where I worked for many years. What if you worked in your field for a period of time and really maxed out your earning potential, but didn’t max out your lifestyle to match that income? You could create a stash of cash in savings and investments that could give you the option to make work optional. Those funds could allow you to move into a career that aligns to where you’re at in life at this time.

We all know that life goes in seasons, and sometimes moving on to a new season is just what is needed.

Ecclesiastes 3:1 says that There is a time for everything, and a season for every activity under the heavens.

Benefits of an encore career in retirement

Let’s move into thinking about of the benefits of an encore career for your retirement. So, why we would want to consider taking this approach to retirement? One of the biggest reasons to move into this type of scenario is being able to have control or flexibility of your time.

When you realize that time is your most valuable asset you might treat it a little differently. Everybody has the same 168 hours every week but no one knows how many weeks or days they’re going to get. When you start to think about that and put that into perspective you have a tendency to want to take control of your time so you can really focus on things that are most important to you, at least that’s how I was.

Now I’m talking about things that you’re passionate about that maybe you’ve lost hope for or never told anyone about. Things that really resonate with your values and being able to do those things without feeling guilty or angry could be very fulfilling.

This could allow you to approach life with a different mentality. There’s a lot of things out there that you probably want to do and when you have control of your time this gives you the opportunity to do some of those things. So when you start to do new things or explore new ideas, guess what happens. New opportunities could come out of that time spent as well.

Also, it could give you an opportunity to work anywhere. You may not have that luxury right now but depending on what your encore career is with the technology that we have today you could potentially be able to work from anywhere in the country or the world for that matter.

It could be investing in other people, relationships, and causes that you believe in but still being able to focus on work that could generate an income that can help you with your expenses and actually ease the transition into a full retirement at some future date. This might be the time when extra money is not necessary at all and you can choose if you need paid employment.

Now another potential benefit is having a change of pace. Many of us live in a non-stop, fast paced, always on the go lifestyle. I’ve never been a supporter of that kind of lifestyle. There’s a reason why the good book says and on the seventh day he rested.

Rest is an important part of our growth and without the time to think, reflect, and enjoy what you’ve done, you’ll always be living by the moment rather than living your life by design.

Now I’m sure you could think of a few more benefits that would make sense for your particular life circumstances and the life that you would like to live because it’s going to be different from mine and I’m sure of that.

Planning is Critical

Alright, lets move on to the next phase where we are thinking about why it’s important to have a plan. If this is an option that might be a possibility for you and you think that your retirement could be moving into an encore career you really half to do some in-depth planning. It’s critical to your success. You’ll need to think about things like having an expense reserve that can cover your needs and provide money for you to live on for a number of months or years.

If you’re starting a business from scratch then you’re going to need a long run way to get started. Most people overestimate how soon the business will be profitable, so you need to think carefully about that and plan on the conservative side so you don’t put yourself or your family in jeopardy. Many companies need at least three years before they really have solid profits.

There are many options and opportunities to consider. You may not be the entrepreneur type and you may choose to work somewhere else part-time for less pay and there’s nothing wrong with that. It’s your choice. You get to choose what aligns to your values.

I know when I was planning for my encore career, I sought council and met with advisors as my wife and I were planning for this new adventure. This is not something you plan in an evening. It’s probably going to be more of a process that unfolds over multiple months or potentially a year or two.

Mind the Gap Years

Another thing that you have to plan for is what I call the gap years. When my family and I were traveling in Europe this past summer one of the things that I’d seen on some of the TV travel shows was getting on and off the tube in London, which is their subway, and the message playing "mind the gap." You wouldn’t think that would be neat to me, but that experience that we got to share as a family and actually hear that saying, ya know, was one of those odd things that we’ll remember and think they really do say that. However, that’s not the gap that I’m talking about.

The gap I’m talking about is the time from when you want to quit your full-time job and move into your encore career and/or early retirement. That could be before you start taking money out of your tax deferred investment accounts like your 401(k) and IRA’s. You can’t pull money out of those accounts until you’ve reached age of 59 1/2 without penalty.

So you shouldn’t count on using that money, nor would I recommend it, since that was the purpose of that money, for your traditional retirement. You’ll need savings and investments or encore career income until you reach that age and if you can’t fill that gap, then you’ll probably want to delay your move until you can do that.

The other thing to think about during these gap years is healthcare. Medicare doesn’t kick in until you’re 65 so you’ve got to have a plan to manage health expenses or at least catastrophic events that could happen because those can really put stress on your financial resources.

Insurance is expensive, the affordable care act, also known as Obama Care, may be an option, private insurance route, or some of the medical share options might fit your family’s circumstances as well.

Know Your Expenses

Okay, so moving on, next we’re gonna think about the expenses. I jokingly ask folks how do you know a retired person from a person that still has a job? A retired person knows exactly how much it takes for them to live every month and they know where their money is going to the penny because it’s that important.

If you want to jump off into an encore career you really need to have a handle on your expenses. A lot of people that have higher incomes often times underestimate what their actual living expenses are for a month. They typically know the fixed costs, like this is how much I pay for a mortgage, utilities, and insurance, but they typically don’t have a grasp on the variable expenses and their spending is usually way off per month by I’m talking thousands of dollars or more, depending on the family.

You can’t do this if you don’t know what it actually costs you to live each month. If you have no idea where you are spending your money then what are you doing?

You may be sacrificing a more fulfilling life because you’ve trapped yourself in the consumer economy and are using up every bit of income you make to satisfy a lifestyle, which you might not really be all that happy with. There’s a reason why many multi-millionaires are just miserable is they’ve identified money to the wrong things that are important.

You can think differently about your life and the energy you have and how it’s spent.

Moving Forward

Okay, so we know that we could possibly "retire" sooner than we think with an encore career. We know some of the benefits and that planning is a key to success and we need to know the details of our expenses. So how do we move forward?

First off, evaluate where you are currently with your vocation or job. If you are working in a job where you are miserable or have just settled, what are you doing there? Don’t sacrifice a more meaningful life because you have an air quotes "good job" that you’ve traded way too much of your time for at the sacrifice of other things in your life.

Next, look at your available assets that you can turn into an income. How much can you generate and how long will it last? You’ve got to figure that out. Remember, we don’t want to touch our retirement plans until we can do so without penalty. So, you’re going to need funds that are available to you without penalty. Maybe you have some other assets like real estate property that you get rental income from. So, add up all of those things and understand what you have available.

Third, evaluate your income opportunity and your real expenses. See how these play out and see if you could actually live on less than you make right now and if the income you can generate will take care of those expenses. You might be surprised at what you find out if you take the time to really dig into the details.

Final Thoughts

And actually this is the process that I went through when I stepped away from my career at the age of 43. This evolved for me over a year and a half as I started to sense that season of change and started asking questions like what would it be like if I…

  • Could control my own time
  • Could do something different that I truly had a passion for or
  • Be able to volunteer more of my time or
  • What would it be like if I could spend more time with my family. I have four kids. They are growing up quickly and that became really important to me.

You’ve heard me say this before, where focus goes energy flows, and that’s how we as a family started to look at the opportunities and what it would take to live life differently. It’s funny how solutions can appear if you take the time and effort to develop them.

Now if you’re thinking about a change, early retirement, or even traditional retirement, then I highly suggest you seek council as you consider your options. I’d be happy to have that conversation with you and share my experience as someone that has lived through that process. If that’s you and you want to have that conversation head on over to agilefinanceradio.com and select the work with me option and schedule an appointment to have an initial conversation at no fee and no obligation.

That does it for this episode of Agile Finance Radio. Tune in next time as we discover more ways to win with money, gain and life, and ultimately retire with confidence.