How To Plan For A Second Career

From Forbes via Yahoo! Finance:

The most successful career switchers take years to learn new skills, network and prepare financially. Here's how to plan for a second career.

1. No rash moves. No one makes a move into a second career overnight. The most successful career changers I have met built their plan out over a period of a few years. They dreamed, saved, added skills, apprenticed, and more. Start working at age fifty on a career you might not get around to until age sixty. If you have lots of time, you can try out some ideas and possibilities.

2. Cast a wide net. Look at your skill set and past experience as transferable to lots of different challenges and fields. Think of it as redirecting or redeploying many of the skills you already have in place. Retired Navy captain Don Covington, who became the company manager for the Big Apple Circus in his mid-50s, told me: "When you think about it, the military and the circus are not that different." What he meant is that the leadership and management skills honed in his Naval career translated to moving a circus troupe of 100-plus from town to town. Look inside and answer some important questions: What am I best at? Ask friends and colleagues too. They might see things that you take for granted.

3. Research. Look for jobs and opportunities that leverage experience. Check out job web sites like encore.org, retiredbrains.com, workforce50.com, to get a flavor for what others are doing and what jobs are out there now. Investigate fields like healthcare, the clergy, eldercare and education that have a growing demand for workers. The Bureau of Labor Statistic's Occupational Outlook Handbook is a good reference for the fastest growing occupations.

4. Get financially fit. For most people, a career restart comes with a financial price tag, particularly if you don't have the cushion of a partner's income or a retirement or severance package. It might mean a sizable pay cut to pursue work in a more altruistic field, the costs of a start-up if you're launching your own business, a hefty tuition bill for more schooling, or a temporary loss of medical and retirement benefits.

Start by charting a budget. It's smart to have a cushion of six months of living expenses or more set aside for transition costs, as well as unexpected emergencies.

If possible, pay off outstanding high-interest credit card debts, college loans, and auto loans. This can take some time, but starting a new venture with as clean a balance sheet as you can will make a difference.

Pare back your discretionary living expenses to reflect a more realistic view of what you'll earn. What are the things that are important in your life? What things are actively giving you pleasure that you might have to give up? One person I know quit his two-pack a day smoking habit. Are you willing to do that?

Moves to consider: Downsize to a smaller home, townhouse or condo, depending on your real estate market. Refinance your mortgage. Move to a cheaper cost of living area. You might even be able to write off moving expenses if it's for a career change.
Entrepreneurs, keep in mind that start-up costs can easily top $10,000 for the average small business owner. Then too, your monthly nut: electric, rent, payroll, and other ongoing outlays start rolling in immediately, often before your revenues do. You will need operating funds to meet these expenses.

5. Boost your credit score. If you need to borrow funds to start your own business, lenders use it to determine whether they should lend you money and what your interest rate will be. If you need to rent office space, landlords may check it to see if you are likely to be a good tenant. And if you're switching to a new company, many employers review it when deciding whether to hire you. A good score today is 760 and up. You may have some work to do. Here's how to bump it up.

Check for mistakes on your credit report. Visit annualcreditreport.com to request a free credit report from the three major consumer credit reporting agencies -- Experian, Equifax and TransUnion.

If you know you're going to make a career change in three to six months, lay low. Don't open new accounts, transfer balances or close accounts, says Credit.com's Personal Finance Expert, Gerri Detweiler. Closing accounts sounds like a good idea, but in reality, it lowers your available credit and pushes your current ratio of debt higher.

And the most obvious way to keep your score in shape... pay your bills on time. Miss a pay date, and you lose big-time -- shocking, but true, your score could be zapped by 110 points. "All it takes is one late payment to crush your score," says Maxine Sweet, vice president of public education for Experian.

6. Keep your hand out of the cookie jar. Don't dip too deep into your core savings. Would-be entrepreneurs aren't necessarily raiding retirement accounts to launch businesses, but they're tapping home equity and other savings, and that has obvious implications for retirement security.

7. Invest in additional education and training. Do your research into the skills or certifications required for your new career. Add the essential skills and degrees before you make the leap. Check out offerings at community colleges for retraining. Consider taking one class at a time.

If possible, take some classes while your current employer is still offering tuition reimbursement. Under federal law, employers can offer up to $5,250 a year in tax-free education-assistance benefits for undergraduate or graduate courses. You don't need to be working toward a degree. But gearing up new skills and adding to your kit, while you're gainfully employed, will prepare you for your transition.

For those who are opening a business, SBA.gov and Score.org, a nonprofit group that provides small business assistance, are top resources for seminars and other help getting you off the ground.

8. Use tax breaks for your education. As for the expense, yes, budget for it, but look into what financial aid offerings and tax breaks might be available to you. Depending on your income, you might qualify for various tax credits, such as the lifetime learning credit, worth up to $2,000 each year for an unlimited number of years. That credit can be used for tuition and fees, books, supplies and equipment for courses to acquire or improve job skills.

If you think you might go back to school in a few years, consider opening a 529 plan. You may be able to deduct qualified tuition and related expenses that you pay for yourself.

9. Shop for a student loan or grant. Low-interest Stafford loans are the main federal loan for students and have a fixed interest rate of 6.8%. Go to FastWeb and FinAid for details and a list of education lenders. Look for scholarships and grants available specifically for older students that are offered by different associations and foundations.

10. Apprentice, volunteer, or moonlight. Do the job first. Volunteering is a great way to get in the door and see what goes on behind the scenes. It's also a great networking opportunity.

If you're job hunting in a new field, it can catch a potential employer's eye. LinkedIn members can now add a "Volunteer Experience & Causes" field to their Profile. Spent some time helping out Big Brothers Big Sisters, The Humane Society of the United States, the American Red Cross? Put it on your profile.

"Professionals often have the misconception that volunteer work doesn't qualify as 'real' work experience," Nicole Williams, LinkedIn's Connection Director says. "You may be a sales person by trade, but if you organized your nonprofit's fundraising event, you can add skills, like event planning or event marketing, to your profile. Having those additional skills can potentially make you a more attractive employee and business partner."

In fact, 41 percent of the 2,000 professionals that LinkedIn surveyed stated that when they are evaluating candidates, they consider volunteer work equally as valuable as paid work experience.

Anne Nolan, executive director of Crossroads Rhode Island, the state's largest homeless shelter, started as a volunteer. She didn't know what she wanted to do when she lost her executive-level job. She had a year's salary and time to think her options through. She decided to volunteer at the shelter -- not because she dreamed it would turn into a full-time job. It was an activity to get her out of her rut and doing something besides worrying about what was next. It gradually became her passion. She was asked to join the board and then was hired on as the director.

Then too, what might sound romantic and wonderful like running a B&B or a winery is not so much when you apprentice and it becomes your daily routine. It could be less appealing when you see up close what it requires.

Before he launched Trust Cellars in Walla Walla, Wash. Winemaker Steve Brooks did his time as a "cellar rat" picking grapes at various vineyards, working in tasting rooms, helping with bottling operations, and more, often gratis, sometimes for minimum wage. He saw the underbelly of the business and still wanted to make a go of it. He also connected with some great mentors to call when he needed advice.

Check out sites like VocationVacations.com, Idealist.org, and volunteermatch.org. Surf onto BoardnetUSA.org, a website for anyone looking for a nonprofit board. Look around you. Where might you lend a hand? Opportunity often comes from places where you least expect it.

11. Set-up a self-employed retirement plan. If you're starting a business, moving to a nonprofit, or a small firm without an employee retirement plan, this is key. One of the biggest mistakes you can make is not planning adequately for your retirement. For more, go to IRS.gov.

12. Shop for health insurance. If you're heading off on your own, check out any industry or alumni associations you belong to for group policies. Don't drop your current job insurance (you can continue it for a time under a law known as COBRA) until you have a new policy in place.

13. Focus on smaller companies and nonprofits. They're more likely to value your overall work experience. You can provide the depth of practical knowledge and versatility that's worth two junior hires, and the learning curve is not as steep.

14. Network. In this era of online resumes, it's all about who you know that can get you in the chair for a face-to-face meeting. People want to hire someone who comes with the blessing of an existing employee or colleague. Join Facebook, Twitter, LinkedIn. It's great way to pull together your professional network.

15. Ask for help. Find a mentor or two working in your new field. Many corporations provide career coaches and counseling on a limited basis to help employees who have retired or lost their jobs. Check out career centers at your alma mater and those operated by area colleges or local government agencies offering workshops on résumé writing, career counseling, job fairs, and retraining programs. If there's a particular industry you're interest in, join an association affiliated with it and attend conferences. (These are also great places to connect with potential mentors.)

16. Brush up on the latest technology. Social media platforms such as Facebook, LinkedIn, Twitter, and most recently, Google + have transformed how you job hunt. As I note in Too Old for The Job? 5 Strategies For 55+ Job Hunters, you must be comfortable with computers and basic programs, navigating the web, e-mail, and mobile technology.

17. Brace yourself for beginner blues. When you find you're the new kid and the rules of the game are a little hazy, you might go into mourning for your old job and sense of security and seniority. This requires some psychological adjustment. All of a sudden, you are earning less, probably making a few mistakes.

18: Don't ruin your hobby. Be aware of the difference between a hobby that is an antidote to your more hectic working world and an activity that really is something you can enjoy round-the-clock. I love horses, for example, but a career training horses would never suit me. It's my escape and relaxation. If the barn became my office, I would lose that magic. Plus, I doubt the saying do what you love and the money will follow would hold true.

19. Be prepared for setbacks. It's not all-smooth sailing, but if you've laid the proper groundwork, you'll get through the rough patches. Having your family, partner or friends at your back for support will help tremendously. They don't have to own your dream, but be supportive.

20. Are you in good shape? I don't mean you can run a marathon, or compete in hours-long tennis matches. When you're healthy, eat properly and have a regular workout regime, you have more energy and are mentally sharper to face the challenges ahead. And the truth is, change is stressful even if you're doing something you have always wanted to do.

While change can wear you down physically, it can also zap your confidence and sense of well-being, particularly when things are new and uncertain. You must be mentally and spiritually fit too.

For many people, a career re-start is often an inner quest to find meaning in your life and give back. And that's tremendously rewarding. If you keep your eyes on that prize, your direction will be clear and you'll navigate the tough spells.

That's not so easy, if you've lost a job in the recession and are without a financial safety net. You've taken a psychological smackdown, along with the loss of income. Fear and frustration can make for some bad decision-making. Changing fields because you're burned out or pissed that you're longer getting promoted as quickly as you once did -- isn't the best way to start anew either. A career change that's reactive will rarely weather the challenges ahead. Read some books on mind-body medicine. You might want to talk to a career or life coach to help you direct your energy and focus for the best results.

21. Do something every day to work toward your goal. Changing careers can seem overwhelming. It's rare that you'll find an ideal starting point or perfect path to take you to your next stage. Begin with a vision of where you want to go, tape a picture on your office wall of what it might look like, journal about your goals. Get things moving by taking small steps. That might mean making a single phone call to ask for advice.

22. Be realistic. Nothing has to be forever. You might have several new careers from here on out. Accept that premise, and it makes a next move more manageable. And who knows, you might do a couple of things at the same time. One fifty-something woman I know is self-employed. She's a tutor, a community college associate professor, a personal fitness trainer, and a caterer. Bon appétit.