Is an 'Encore Career' an Option for You? - TheStreet



) -- Middle-aged Americans who want to

switch careers

later in life have a problem: While they'd love to follow their passion, they don't have the savings in the bank to pull the move off. In the end, it's all about the "income gap."

That's a cultural problem, as data show millions of Americans are already in what social observers call "encore careers" and millions more want to join them. A November study from San Francisco-based

Civic Ventures

, a self-described baby boomer think tank funded by the


(MET) - Get Report

Foundation, says 9 million Americans between ages 44 and 70 have second careers, up from 8.4 million in 2008.

Americans who want to switch careers have a problem: They don't have the savings to pull off the move.

In addition, 31 million more Americans in the same age group are "interested" in

second careers

. Civic Ventures describes encore careers as careers "that combine personal meaning, continued income and social impact." They're also sometimes considered an alternative to retirement.

But it's the second attribute that may stop

many baby boomers

in their tracks from pursuing -- or sustaining -- encore careers.

That's what Civic Ventures found in a

follow-up study

released Wednesday on baby boomers and encore careers.

In that study, the organization says financial challenges are "hampering the plans of tens of millions of people who are interested in encore careers."

The study says two out of three Americans engaged in encore careers saw reduced income or no income at all in transitioning to different vocations later in life.

"There's a big payoff from encore careers, for individuals and for our entire society," said Marc Freedman, founder and CEO of Civic Venture, in a press release. "But making the switch is hard. Employers, policymakers and all of us in our own lives need to think creatively about how to make the investments in encore transitions that lead to these new, more fulfilling careers."

The report takes a wide-ranging look at how boomers are adapting to second careers and what's stopping them from enjoying more success and career satisfaction.

Some highlights from the report include the following:

  • Civic Ventures says 9 million boomers who are already engaged in encore careers began thinking about "encores" by age 50.
  • Some took the time and trained for their new vocations first: 23% participated in local volunteer programs, 20% enrolled in education or training courses, and 13% volunteered at their local places of worship.
  • Financial worries top the list of reasons Americans won't take the step into a second career. The data show 40% of boomers don't feel secure enough financially to make a career change in a rough economy.
  • Even when already in an encore career, money anxieties don't really abate, and 67% of Americans in encore careers "experienced gaps in their personal income during the transition to their encores, reporting that they earned no money (24%) or that they earned significantly less during the transition than they earned at their previous jobs (43%)."
  • Also, 79% of study respondents told researchers they experienced a financial gap of six months or more, while 36% say their income gap lasted more than two years. "Most of those who answered (65%) said they relied on personal savings alone to make ends meet," Civic Ventures said.

Study researchers do say that if you can pull off an encore career successfully, eventually the money can come rolling in, which, as the report notes, "can boost lifetime financial security."

But the real key to success is good preparation, solid financial planning and affordable training programs funded by the public and private sectors. The study also calls for Social Security reforms "clarifying existing benefit options and creating new flexibility in starting and stopping benefits

that could let individuals use Social Security as an income support for encore career transitions, while preserving and strengthening its role in providing late-life financial security."

Encore careers can well be the crown jewel of a baby boomer's entire career. But boomers who pursue them need two primary things to succeed --


and a big-time reality check on how such careers will affect their lives financially.

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