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4 Ways to Bridge the Financial Gap to an Encore Career

It shouldn't be so hard to finance the transition to a career helping others, and the CEO of has suggestions to make it easier

By Marc Freedman

Meredith McKenzie left the real estate industry in fits and starts as she struggled to switch careers and follow her passion: river conservation.
At 55, she traded her expensive California beach house for a 300-square-foot converted garage, living like a grad student. Maybe an undergrad.
For a while, McKenzie worked for the Arroyo Seco Foundation, trying to preserve a river in the Los Angeles area, but the group’s financing faded. Eventually, she cobbled together a mix of work gigs, doing environmental consulting, teaching and blogging, while selling real estate on the side.
“I will do whatever I have to so I can do this work,” she told me. “If that means for a couple of years I have to live like a nun, then I will live like a nun, because this is the work I want to do for the rest of my life.”
Extreme Sacrifices for Encore Careers

McKenzie’s passion is matched by the other 9 million Americans ages 44 to 70 who’ve managed to switch to work that betters the lives of others — work that provides income and a personal sense of meaning. They represent a wealth of talent and experience for schools, nonprofits, public agencies and social ventures. But the sacrifices McKenzie made are, for most people, too extreme.
New research from and MetLife Foundation shows that the road to an encore career can be fraught with challenges.
Those already in encore careers said it took them an average of 18 months to make the transition. Two-thirds said they had little or no income during the time they were transitioning; most relied on personal savings to make ends meet.
The process of moving into the new stage of life beyond midlife and making the most of it — a stage that for many includes good health, energy, creativity and the desire to create a better world — shouldn't be so hard. But too often, those who grab the brass ring are heroic, lucky or loaded. It's also in the national interest to help people like McKenzie bridge the gap so they can afford to have encore careers.
How to Help Bridge the Gap

We’ve been remarkably adept at extending lives, but our innovation in reshaping those longer lives has struggled to keep pace. It’s time to catch up, to be creative, to find new ways to finance encore transitions that put additional years to the best possible use for individuals and society.
I think the federal and state governments and employers should make four changes that would make encore transitions easier:
Federal and state governments should create Individual Purpose Accounts. Older adults can already use 529 college savings accounts for their education expenses. But more is needed. Legislators should propose tax-advantaged savings vehicles — which could be called Individual Purpose Accounts — to help bridge the gap for encore careers. One model is the Lifelong Learning Account, developed by the Council for Adult and Experiential Learning, an employer-matched, portable account that finances education and training.
Federal student financial aid should be reformed. Students in the second half of life have few options when it comes to student loans. Encore career seekers need loans and grants specifically for the types of short-term and part-time career training they typically prefer.
Employers should provide more “encore fellowships.” Paid encore fellowships match skilled, experienced professionals at the end of their midlife careers with social-purpose organizations and can ease the way to more permanent nonprofit or public employment. (Next Avenue has a story about one woman’s experience as an Encore Fellow.)
Intel, for example, offers its retirement-eligible employees in the United States the chance to apply for paid assignments of six months to a year in community organizations. Other corporations could do the same.
Social Security benefits should be made more flexible. Why not allow people to start and stop their Social Security benefits as the circumstances in their lives change? People could use the benefits to subsidize their encore career transitions, then stop taking benefits as they return to the workforce.

Enhanced in this way, Social Security can help people receive essential benefits and contribute to the greater good. That would honor the social in Social Security, the commitment that begins with our shared responsibility for one another. And it would honor the impulse toward social purpose — helping others, giving back, leaving a legacy — that is among the strongest motivations for working harder.

These four policy changes can ease the path to encore careers, just as we eased the path to retirement half a century ago.

Marc Freedman
Marc Freedman is the CEO of, and author, most recently, of "How to Live Forever: The Enduring Power of Connecting the Generations," now out in paperback. Read More
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