Stretch Your Nest Egg: The Second Career

Editor's Note: Retirement-planning in normal times is like home maintenance—with a little bit of effort and expense, applied regularly over time, you keep your structure sound. But planning right now is like figuring out what to do after a tornado blows your kitchen and garage into the next county. Despite the market’s recent rally, many people’s nest egg portfolios remain mangled beyond recognition. In this special report, SmartMoney features advice that can help investors roll up their sleeves and rebuild.

When Leonard Dest retired a year and a half ago from a career as an aerospace executive, he took on a classic retiree “dream job”—working as executive director of a group of Long Island winemakers, with a salary barely a fifth of what he used to make. But the tsunami market of 2008 sank all boats; by the end of the year, his portfolio was down by a third, and he decided he could no longer afford to chase his oenological passion. This January he “unretired,” taking a full-time executive position at a rocket engine manufacturer while he repairs his cracked nest egg. “When you’re semiretired, paper losses seem a lot more scary,” Dest says.

When retirees think about second careers, the possibilities seem endless: Become a painter! Open a dog-biscuit shop! Read film scripts! Most of those dream jobs assume that the retiree wouldn’t need to make much money. But with portfolios in the tank, that’s no longer true. And with at least 12 million Americans searching for work, landing meaningful (or even paid) employment in a new industry is getting a lot harder for the graying set. Art Koff, the CEO of RetiredBrains.com, a site that posts job opportunities for retirees, says that full-time listings on his site dropped by about a third over the last four months of 2008, while traffic grew tenfold. And since switching careers often means a pay cut, staying within the industry where they made their name often makes sense for retirees.

That might sound bleak—isn’t the point of retirement to get out of the familiar grind? But experts point out that someone can stay in a familiar field while still getting a change of scenery, and maybe even more interesting responsibilities. Marc Freedman, CEO of Civic Ventures, a firm that studies older employees, says job hunters should remind recruiters “they basically have years of training that someone else has paid for.” Workers age 50 and older can often harness a lifetime of contacts—something that’s even easier thanks to networking sites like LinkedIn. It’s also good to note that contrary to popular opinion, retirees are often more stable than younger workers as part-time or contract employees, especially if they have Medicare and aren’t searching for a full-time gig with benefits.

For those set on industry hopping, there will always be opportunities in the hottest fields. Analysts estimate that over the next decade, nonprofits will need hundreds of thousands of manager-level employees with expertise in disciplines like marketing or finance. Health care and education tend to be friendly environments where employment is relatively recessionproof. And new training can also give a job search a needed boost. When the housing market in Southern California began to crater, Jan Albert lost her job at a real estate investing firm. But after dozens of hours of night-school gerontology classes, she recently started a business that screens home health aides and makes the homes of the elderly safer. “Boomers are desperate for this type of help,” Albert says of her newfound passion, “and besides, it makes me happy.”

Read the rest of our special report: