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2 Ways to Help More People Have Encore Careers

An Encore IRA and Encore Bill could make the midlife transition easier


(This article is adapted from The Upside of Aging, edited by Paul H. Irving.)

Healthier and more energetic than their predecessors, many of those moving beyond the middle years today want continued purpose in life. They want engagement, stimulation and challenges. Many want to help. They also want continued income, often out of necessity.

And, by dint of their hard-won sagacity, their contributions to the workplace and to society at large might be even more relevant and meaningful than ever.

Taking advantage of this resource — a ready, able and substantial graying population — can benefit societies in countless ways.

(MORE: Ways to Get More Purpose From Your Work)

Why More Encore Careers Are Needed

We need to rearrange society to help the graying population find its footing as it surges into uncharted territory — and to do so in a way that will not only serve boomers, but all the succeeding generations. That challenge entails the invention not only of a new stage of life, but one of work, what I’ve taken to calling an encore career, a second act at the intersection of passion, purpose and a paycheck.

I feel more convinced than ever that these needed social innovations can transform an unsustainable situation into one both sustainable and attainable, and that can produce an enduring payoff.

Entering this new life stage is an enormous transition, one commensurate to the shift from employment to retirement, though altogether different.

A ‘Gap Year’ Towards an Encore Career

One strategy to aid this transition is a “gap year” specifically tailored to this stage of life, much as a growing number of college people take a gap year between high school and college.

(MORE: Taking a ‘Gap Year’ in Midlife)

Just as a young person’s gap year is typically followed by college, an adult’s gap period may well precede further education. The education suited to this stage of life is likely to combine vocational preparation, personal transformation and intellectual stimulation, all with the goal of paving the way to a new stage of productive contribution.

Of course, most Americans are hardly in the position to self-fund a gap year or foot the bill for their own tuition even as, in many cases, they are still putting their children through school.

However, this should not — and does not have to — stand as an absolute barrier. We need to get creative to develop the public and private-sector solutions that will help those entering the encore years as they regroup for a productive new stage.

In particular, I suggest two possible strategies: Individual Purpose Accounts and an “Encore Bill” akin to the post–World War II G.I. Bill.

Individual Purpose Accounts

When they were created in 1974, Individual Retirement Accounts (IRAs) were intended to supplement pensions or other traditional retirement vehicles, all premised on the notion of a life map that no longer applies. Why should we save all our money for an extended period of not working when we really need savings to cover the costs of more transition periods in life?

We should be saving for this shift, given the cost of going back to school or living without a full salary during a gap year or fellowship.

Since society has so much at stake in such a large segment of the population finding their footing post-midlife, we should be creating tax-advantaged vehicles like the IRA to help fund this transition.

What about an IPA — an Individual Purpose Account aimed at the transition or transitions in one’s 50s and 60s?

Financial institutions are well placed to offer IPAs that integrate, streamline, and automate the processes for taking advantage of tax treatments, employer matches, investment options, loan programs, and other incentives.

A side benefit: If the financial-services companies are involved in developing these products, their marketing muscle will be applied to putting the new stage on the map.

An Encore Bill

The G.I. Bill is credited as a central force behind the decades of prosperity that followed World War II. Millions of soldiers were returning home, facing a harsh transition to a postwar future in a changing civilian landscape at home.

The G.I. Bill was created to honor the veterans’ sacrifice and service, and to ease the entry of this large influx of workers into postwar employment. Although the social forces today are different, tens of millions of people are now undergoing a great midlife migration and, like those returning G.I.s, their happiness and society’s well-being are both at stake.

Yet at this point in history, no coherent policy agenda exists to help those millions develop their human capital, transition into new roles, or handle financial challenges. No incentives have been created to channel their skills to where they are needed most.

No wonder this shift so far has remained largely a do-it-yourself undertaking.

There are positive signs. The Troops to Teachers program, for example, proves that skills developed in midlife military careers translate well into encore careers as public school teachers.

Just as important, Troop to Teachers demonstrates how this midlife juncture can offer a second chance — an opportunity not only for new fulfillment, but also for social mobility, a chance to move up a ladder that wasn’t available to many when they first started out.

Still, such efforts are just a beginning — a hint at what is needed.

What It Will Take

There’s no question all of this requires a sizable investment, along with a big change in thinking. But just think of the imagination we mustered in the last half of the 20th century, transforming retirement from a dreaded destination to a centerpiece of the American Dream. The accomplishments were groundbreaking and breathtaking.

Will our leaders recognize the need for comparable innovation in social infrastructure and public policies to address the challenges as millions move toward a new stage of life?

My suspicion is that none of this will happen without a social movement driven by those with the most to gain from the change, all of those over 50 who can enjoy a second chance at meaning and impact.

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