Finding a new career later in life can be exciting and challenging, depending on the circumstances. Either way, you may experience financial trials during the time you move from one career to another.
If you are tempted to weather the change by living for a while on your retirement savings, you may be in a similar camp as many others taking on the same journey. Here are some considerations for this unique experience:
The Job Outlook Today, and What That Means For Your Finances
Following the Great Recession, Americans who were out of work faced a steep uphill battle. Every job that was open had seven people looking to fill it. The numbers are much better today, which means finding a new job is far less intimidating and much more practical.
But what about finding a new career? That can be a little bit of a different story than just finding a new job. If you’re exploring options that are brand new to you, the path to success might have several sharp turns along the way. Most success stories about changing careers involve a fair amount of lateral movement. This means that finding a new career may mean your earnings are lower than you are used to as you start out, and it could take time before you are able to increase your earnings. During this time, you not only need to look at your monthly spending but also the bigger picture — specifically, how changes during this time could affect your financial situation during retirement.
Navigating the Change
In order to protect your retirement investments you will need to account for some major components that could impact your financial freedom. For example, as you get older, health insurance becomes an even stronger factor in your financial outlook. Healthcare costs tend to rise, even for people who have led healthy lives, and many suddenly find themselves encountering new challenges as they age. Make sure your new career offers healthcare options that can cover these costs as an alternative to pulling money from your retirement plan.
Do you have dependents that will be impacted, should your career plans not pan out? This often affects families during a crisis. When you see those around you at risk, dipping into retirement savings may seem like a readily available option to help. If this is something you could picture yourself doing down the road, pause as you embark on a career change to make sure you have the resources in place.
If you are experiencing change in your life and want to discuss your financial future, contact us at Lawson Kroeker. We can help you navigate strategies for retirement, giving and more — while you set out on a new career course where anything is possible.