Personal Finance in Your 50s All-in-One For Dummies E-Book

Eric Tyson

• Herausgeber: John Wiley & Sons
• Kategorie: Ratgeber
• Sprache: Englisch
• Veröffentlichungsjahr: 2018

Seitenzahl: 952

Beschreibung

Manage your finances and enjoy your retirement Retirement security is one of the most pressing social issues facing the world in the next 30 years--so if you're approaching your golden years, it's essential to have a secure financial future. Personal Finance in Your 50s All-in-One For Dummies provides targeted financial advice and assists soon-to-be or established boomers with making informed decisions about how best to spend, invest, and protect their wealth while planning for the future. Retirement is an exciting time ... but it can also be scary if you're not sure that you have your ducks in a row. This hands-on resource arms you with an arsenal of beginner to intermediate personal finance and estate planning techniques for everything from spending, saving, navigating insurance, managing medical costs, household expenses, and even employment. * Build a diversified portfolio * Create emergency funds * Avoid scams and frauds * Improve your estate planning With the help of this all-in-one resource, you'll get a succinct framework and expert advice to help you make solid decisions and confidently plan for your future.

Leseprobe

Personal Finance in Your 50s All-in-One For Dummies®

Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com

Copyright © 2018 by John Wiley & Sons, Inc., Hoboken, New Jersey

Certain materials excerpted from:

Getting the Job You Want After 50 For Dummies, Copyright © 2015 by AARP

Personal Finance After 50 For Dummies, 2nd Edition, Copyright © 2015 by Eric Tyson and Bob Carlson

Selling Your House For Dummies, Copyright © 2018 by Eric Tyson, Ray Brown, and John Wiley & Sons, Inc.

Published simultaneously in Canada

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Library of Congress Control Number: 2018937027

ISBN: 978-1-119-47151-6 (pbk); ISBN: 978-1-119-47153-0 (ebk); ISBN: 978-1-119-47146-2 (ebk)

Personal Finance in Your 50s All-in-One For Dummies®

To view this book's Cheat Sheet, simply go to www.dummies.com and search for “Personal Finance in Your 50s All-in-One For Dummies Cheat Sheet” in the Search box.

Table of Contents

Cover

Introduction

About This Book

Foolish Assumptions

Icons Used in This Book

Beyond the Book

Where to Go from Here

Book 1: Managing Your Career and Retirement

Chapter 1: Finding a New Job after 50

Recognizing the Need for and Value of Experienced Workers

Tallying the Benefits of Staying in the Workforce

Reorienting Yourself to Today’s Job-Search Realities

Deciding What (Else) You Want Out of Work

Pursuing Your Passion and Finding Purpose

Putting Proven Success Strategies into Practice

Dealing with Ageism

Chapter 2: Dealing with Changes in Employment

Filing for Unemployment Benefits

Getting Your Financial House in Order

Financing Any Additional Education and Training

Writing Off Your Job-Hunt Expenses

Accounting for Social Security Benefits Reductions When You Work

Taking Advantage of Additional Public Benefits

Providing Benefits for Yourself

Chapter 3: Joining the Ranks of the Self-Employed

Working on Contract

Launching Your Own Business

Becoming a Social Entrepreneur

Exploring Franchising Opportunities

Chapter 4: Tracking Small Business Revenues and Costs

Establishing an Accounting System for Your Business

Keeping Good Tax Records for Your Small Business

Chapter 5: Estimated Taxes and Self-Employment Taxes

Form 1040-ES: Estimated Tax for Individuals

Keeping Current on Your Employees’ (and Your Own) Tax Withholding

Schedule SE: Self-Employment Tax

Form 8889: Health Savings Accounts (HSAs)

Chapter 6: Developing a Retirement Plan

Deciding When to Retire

Knowing How Much You Really Need for Retirement

Eyeing the Components of Your Retirement Plan

When Setting Up Your Couples Plan

Crunching the Numbers

Making Plans for Nonfinancial Matters

Chapter 7: Grasping Retirement Accounts and Their Rules

Eyeing the Characteristics of Retirement Accounts

Identifying the Different Types of Retirement Accounts

Rolling Over Retirement Balances

Choosing Beneficiaries for Your Retirement Accounts

Taking Required Minimum Distributions, or RMDs

Book 2: Getting Your Affairs in Order

Chapter 1: Ensuring That Your Last Wishes Are Honored

What Can Happen When You Don’t Plan Your Estate

Reaping the Benefits of Planning Your Estate

Looking Out for Common Pitfalls

Realizing What Happens If You Don’t Have an Estate Plan

Creating Your Will or Trust

Chapter 2: Planning Your Bequests

Calculating Your Assets

Determining Your Intended Heirs and Beneficiaries

Thinking about Your Family Circumstances

Estate Planning for Second Families

Estate Planning for Your Business

Appointing the People Who Will Carry Out Your Estate Plans

Finding Professionals to Assist You

Chapter 3: Providing for Your Children and Dependents

Choosing a Guardian

Managing Your Child’s Assets

Providing for Your Child’s Needs

Chapter 4: Writing and Signing a Will

Deciding Whether a Will Serves Your Needs

Exploring the Types of Wills

Elements of a Will

Executing a Valid Will

Book 3: Dealing with Insurance

Chapter 1: Seven Guiding Principles of Insurance

Keep It Simple

Don’t Risk More than You Can Afford to Lose

Don’t Risk a Lot for a Little

Consider the Odds

Risk a Little for a Lot

Avoid Las Vegas Insurance

Buy Insurance Only as a Last Resort

Chapter 2: Buying Insurance

Understanding What Makes a Balanced Insurance Program

Customizing Each Policy to Meet Your Unique Needs

Choosing Your Professional Adviser

Choosing an Insurance Company

Chapter 3: Getting the Most Out of Medicare

Starting Medicare: A Broad Overview of Enrollment Deadlines

Understanding Part A

Exploring Parts B and C

Qualifying for Prescription Drug Coverage with Part D

Eyeing a Medicare Supplement

Resolving Some Sticky Issues

Chapter 4: Introducing the Personal Umbrella Policy

Discovering the Umbrella Policy’s Major Coverage Advantages

Coordinating an Umbrella with Your Other Insurance

Determining How Many Millions to Buy

Book 4: Handling Budgets and Investments

Chapter 1: Protecting Your Employment Income

Assessing Your Need for Life Insurance

Protecting Your Employment Income: Disability Insurance

Investing In and Protecting Your Health

Chapter 2: Managing Budgets and Expenses

Pointing Out Some Retirement Worries You May Have

Spending Your Nest Egg

How Spending Really Changes in Retirement

Managing Your Expenses

Chapter 3: Guiding Investments and Distributions in Retirement

Guiding Your Investments through Retirement

Looking Closer at Annuities

Choosing Your Pension Options

Eyeing Withdrawal Strategies for Your Investment Accounts

Chapter 4: Making Your Best Choices under Social Security

The Lowdown on Social Security

Determining When You’re Eligible for Benefits

Taking a Closer Look at Spouses’ and Survivor Benefits

Identifying When You May Need to Receive Benefits

Noting How Working Reduces Benefits

Preserving Your Benefits

Being Aware of Potential Income Taxes on Your Benefits

Changing Your Mind: A Do-Over

Looking at What the Future Holds for Social Security

Book 5: Planning Your Estate

Chapter 1: Yes, You Have an Estate

What Is an Estate?

Why You Need to Plan Your Estate

Why Your Estate-Planning Goals Are Different from Your Neighbors’

The Critical Path Method to Planning Your Estate

Getting Help with Your Estate Planning

Chapter 2: Bean Counting: Figuring Out What You’re Worth

Calculating the Value of Your Real Property

Calculating the Value of Everything Else: Your Personal Property

Dead Reckoning: Subtracting Your Debts from Your Assets

Giving Gifts throughout Your Life to Reduce Your Estate’s Value

Calculating Adjustments in Your Estate’s Value Due to Life Changes

Chapter 3: Probate and How to Dodge It

Probing Probate: What You Should Know

Knowing the Good, the Bad, and the Ugly of Probate

Streamlining the Probate Process

Appointing Your Person in Charge

Thinking Things Through When Someone Asks You to Be a Personal Rep

Understanding Will Substitutes

Sorting through the List of Will Substitutes

Identifying Some Less Common but Worthy Will Substitutes

Chapter 4: Understanding Trusts

Defining Trusts, Avoiding Hype

Trust Power — Making Your Beneficiaries Smile

Sorting Out Trusts — from Here to Eternity

Chapter 5: Minimizing Estate-Related Taxes

Figuring Out Where You Are Today

Fortune-Telling: Picturing the Future as Best You Can

Hmmm … Deciding on Strategies and Trade-Offs

Putting Together a Comprehensive Estate-Related Tax Plan

Book 6: Tapping Into Your Home’s Value

Chapter 1: Making Important Housing Decisions

Analyzing Moving

Tapping Your Home’s Equity: Reverse Mortgages

Looking at Tax Issues Regarding Your Housing Decisions

Chapter 2: Reverse Mortgages for Retirement Income

Grasping the Reverse Mortgage Basics

Shopping for a Reverse Mortgage

Deciding Whether You Want a Reverse Mortgage

Chapter 3: Deciding to Sell

Figuring Out if You Really Need to Sell

Knowing the Health of Your Housing Market

Chapter 4: Exploring the Economics of Selling

Estimating Proceeds of Sale

Assessing the Financial Feasibility of a Move

Chapter 5: Determining Your House’s Value

Defining Cost, Price, and Value

Determining Fair Market Value (FMV)

Using a Comparable Market Analysis

Bidding Wars

About the Authors

Connect with Dummies

Index

End User License Agreement

Guide

Cover

Table of Contents

Begin Reading

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Introduction

Welcome to Personal Finance in Your 50s All-in-One For Dummies!

So, you’ve hit your 50s, your job is fulfilling and lucrative, your kids got full-ride scholarships to college, your mortgage is paid off or close to it, you invested early and wisely, your early retirement is on track, and you have an updated, signed will and a plan for your estate that will ensure that exactly what you want to happen to your stuff when you die will in fact happen. Nicely done! Go and be well. You can put this book down now.

What? You’re still reading? Hmmm. That must mean you hit a snag or two along the way to personal financial nirvana. Well, don’t worry. You’re hardly alone. By picking up this book, you’ve already shown you want to get yourself on a better track, and you’ve taken your first step toward doing so. This book is all about understanding and improving your financial health from late middle age heading into retirement.

It’s never too late to right the ship! There’s a whole lot you can do — even in your 50s — to help yourself have a more comfortable life as you head into your more advanced years, and this book is chock full of juicy advice on that stuff.

About This Book

You hold in your hands a big ol’ conglomeration of some of the best For Dummies material on the topic of bettering your economic picture in your later working years. It’s divided into six sections, each of which is itself a miniature “book” that focuses on one aspect of personal finance. Check out the Contents at a Glance to see how the book is organized.

You can peruse this book in the way most books have been perused since time immemorial — from cover to cover, starting on Page 1. Or you can use it as a reference guide, looking up specific topics in the Index or Table of Contents.

To make reading and understanding personal finance topics a bit easier, this book uses some conventions to help you along the way:

Italics:

Newly defined terms are set in

italics.

Acronyms:

Acronyms are spelled out on first use.

Websites:

You’ll find references to websites that may provide additional information or make some task easier. Every effort has been made to make sure the links are functional at the time of publishing. If you ever see a website URL split from one line to the next, rest assured there are no extra hyphens, so type the address in your browser just as it appears. If you’re reading the e-book, just tap the link to go to that website.

Foolish Assumptions

Here’s what this book assumes about you:

You’re middle-aged.

You’re no spring chicken. You did not just fall off the turnip truck. You’ve been, as it were, around the block. As such, you probably know very well what a mortgage is, for example, but may not know what a

reverse

mortgage is exactly. You know there are these mysterious programs called Medicare and Social Security headed your way in a few years, but as for details, well … you haven’t exactly studied up on them — yet.

You know you can do better with your money

. You’re busy — work and family duties have had you running around for years. You have a vague sense that you’re not as well off as you should be, and you know there must be things you’re not doing that you should be doing, and vice versa. You’ve come to the right place.

That’s it! If those two descriptions apply to you, you’re ready to read on for hundreds of ideas and expert advice on whipping your finances into shape.

Icons Used in This Book

This book uses the following icons to point out certain insights:

This one indicates short summaries of subject matter you’ve just read about and also points out important things to keep in mind for later. If you hesitate for a moment when reading the core content, check for one of these to keep progressing smoothly.

This icon flags stuff that may be more technical than you really need to know. The information included with this icon isn’t necessary to your understanding of the topic at hand, and you can safely skip it.

This icon is just what you think it is. It highlights something particularly helpful, useful, surprising, or efficient that is well worth paying extra attention to.

This icon flags stuff that could get you in trouble or hurt you financially. Ignore these at your peril!

Beyond the Book

In addition to the material in the print or e-book you’re reading right now, this product also comes with some access-anywhere goodies on the web. Check out the free Cheat Sheet and other free articles at www.dummies.com. Just search for “personal finance in your 50s all-in-one.”

Where to Go from Here

Ready to go? You’re about to dive into lots of valuable advice. As mentioned, feel free to pour a mug of coffee (or, heck, beer), sink into your favorite chair, and plunge into Book 1, Chapter 1. Or if you’re really interested in something specific, look it up in the Index or Table of Contents.

Maybe you’re in better shape in some areas than others. Maybe your mortgage is actually paid off or close to it. However, you hate your job and want to finally strike out on your own and be your own boss, but you’ve never had the courage to do it. Try Book 1, Chapter 3.

Or perhaps you really do have an up-to-date will, but you’re terrible at managing a budget. Check out Book 4, Chapter 2 for loads of tips on budget management.

Or you do indeed love your job, but you’ve put away next to nothing for retirement and you’re starting to get nervous you’ll never be able to. Get thee to Book 1, Chapter 6 to get started on that. (And, no, it’s never too late.)

No matter where you begin, you’re sure to find a wealth of great ideas in this big old book that can make your life better. Heck, even if you pick up only one or two great ideas and implement them — such as buying an umbrella insurance policy (Book 3, Chapter 4), figuring out what you’re worth so you can plan where it should go after you’re gone (Book 5, Chapter 2), or turning the equity in your home into a steady income stream that pays you every month (Book 6, Chapter 2) — then the book already paid for itself many times over.

Congratulations on recognizing that you can and should be doing better than you are financially. Really, that’s all of us. Because who has time to become an expert on all the dizzying aspects of personal finance? Oh, right … the authors of the following pages! So let our hard-earned wisdom guide you. It’s time to dive in!

Book 1

Managing Your Career and Retirement

Contents at a Glance

Chapter 1: Finding a New Job after 50

Recognizing the Need for and Value of Experienced Workers

Tallying the Benefits of Staying in the Workforce

Reorienting Yourself to Today’s Job-Search Realities

Deciding What (Else) You Want Out of Work

Pursuing Your Passion and Finding Purpose

Putting Proven Success Strategies into Practice

Dealing with Ageism

Chapter 2: Dealing with Changes in Employment

Filing for Unemployment Benefits

Getting Your Financial House in Order

Financing Any Additional Education and Training

Writing Off Your Job-Hunt Expenses

Accounting for Social Security Benefits Reductions When You Work

Taking Advantage of Additional Public Benefits

Providing Benefits for Yourself

Chapter 3: Joining the Ranks of the Self-Employed

Working on Contract

Launching Your Own Business

Becoming a Social Entrepreneur

Exploring Franchising Opportunities

Chapter 4: Tracking Small Business Revenues and Costs

Establishing an Accounting System for Your Business

Keeping Good Tax Records for Your Small Business

Chapter 5: Estimated Taxes and Self-Employment Taxes

Form 1040-ES: Estimated Tax for Individuals

Keeping Current on Your Employees’ (and Your Own) Tax Withholding

Schedule SE: Self-Employment Tax

Form 8889: Health Savings Accounts (HSAs)

Chapter 6: Developing a Retirement Plan

Deciding When to Retire

Knowing How Much You Really Need for Retirement

Eyeing the Components of Your Retirement Plan

When Setting Up Your Couples Plan

Crunching the Numbers

Making Plans for Nonfinancial Matters

Chapter 7: Grasping Retirement Accounts and Their Rules

Eyeing the Characteristics of Retirement Accounts

Identifying the Different Types of Retirement Accounts

Rolling Over Retirement Balances

Choosing Beneficiaries for Your Retirement Accounts

Taking Required Minimum Distributions, or RMDs

Chapter 1

Finding a New Job after 50

IN THIS CHAPTER

Understanding current workplace realities

Figuring out what you want … and want to do

Finding your place in the workplace

Retooling your job-search strategies for the 21st century

Welcome, job seekers! Finding a job at any age takes work and dedication. Some older job seekers assume that employers would rather outsource jobs to cheaper workers overseas or hire younger, less experienced workers for lower wages. Although these suspicions are confirmed by the hiring practices of some organizations, current studies show that employers are increasingly willing to consider older candidates and that age alone isn’t necessarily the reason some employers are unwilling to consider older candidates.

This chapter aims to help you shift your attitude about job hunting from one of apprehension to one of hope and possibility and to show you a few simple ways to rev up your job-search mojo to today’s new workplace reality for job seekers age 50 and older.

Recognizing the Need for and Value of Experienced Workers

The times really are a-changin’, and that’s good news for your job-hunting prospects. Whether you want to work in an office job, teach yoga, or head up a company, more employers are starting to realize that hiring workers age 50 and older is good for business, and more and more employers are discovering the value of experienced workers. Unfortunately for job seekers 50 and older, the fact that demand for experienced workers is on the rise is a well-kept secret. Realizing that employers need you is an important first step in the process of finding and landing the job you want. It gives you the enthusiasm and confidence to set out on what may be a long and arduous journey. This section reveals the reasons that the demand for older workers is rising — to invigorate you for the journey ahead and remind you of just how valuable you are to employers who need your skills, talents, and experience.

A job search can be disheartening for anyone, regardless of age. And if that’s what you’re feeling, never show it to a prospective employer. Always highlight the value you have to offer in every job-search communiqué you send out. If you need a confidence lift, take some time and review all your previous achievements.

Noting a change in the current workforce

Many CEOs are increasingly aware that they need to have older, more experienced workers on board. As the population ages, the workforce is aging right along with it. U.S. employees 65 and older now outnumber teenagers in the workforce for the first time since 1948. In 2002, workers 50 and older comprised 24.6 percent of the workforce. By 2012, they represented 32.3 percent. And by 2022, they’re projected to be 35.4 percent of the total workforce.

This emerging trend isn’t likely to change anytime soon. More than one in three workers age 45 and older expects to retire at age 66 or older, compared to just over one in five 10 years ago. Moreover, 72 percent of workers ages 45 to 74 envision working in retirement.

Employers are getting worried about their future workforce. In a recent survey by the Society for Human Resource Management (SHRM), one-third of HR professionals predicted that the loss of talent resulting from retirements or departures of workers age 55 and older would be either a problem or a crisis for their organization in the next six to ten years. The Manpower Group 2014 Talent Shortage Survey found that 40 percent of U.S. employers reported difficulty in filling jobs.

Seeing experienced workers as an affordable option

The old concerns that hiring someone your age would probably be too pricey are being debunked. Contrary to common perception, workers age 50 and older don’t cost significantly more than younger workers, according to the report “A Business Case for Workers Age 50+: A Look at the Value of Experience 2015,” commissioned by AARP and conducted by Aon Hewitt.

Shifting trends in reward and benefit programs mean that adding more age 50-plus talent to a workforce results in only minimal increases in hard dollar total labor costs. These trends include a broad move by large employers to performance-based versus tenure-based compensation, the decline in traditional benefit pension plans, and the fact that healthcare costs are increasing at a slower rate for older workers compared to younger workers.

Meanwhile, in today’s global and fast-paced workplace, firms often don’t have the time to squander while a younger worker ramps up skills and knowledge. Companies are slowly realizing that to stay competitive, it’s smarter to seek out and hire experienced workers. That means you’re on the cutting edge of a sweeping change in the demographics of the workplace.

Recent surveys show that companies are realizing that it’s strategically smart to pay more attention to recruiting and retaining workers age 50 and older. When organizations need someone to step in and do the job right now and solve an existing problem, they’re eager to hire the experienced worker.

That’s what the AARP report unveiled. Findings from a 2014 SHRM survey of HR professionals also back up that trend. SHRM’s The Aging Workforce survey also found that two-thirds of HR executives canvassed reported that their organization employed older workers who retired from other organizations or careers before joining their organization. Gold stars all around.

The Aging Workforce survey, part of a three-year national Aging Workforce Initiative by SHRM and the SHRM Foundation and funded by the Alfred P. Sloan Foundation, also found that 61 percent of the 1,900 randomly selected SHRM HR professionals indicated that their organization had attempted to capitalize on and incorporate the experience of older workers in recruitment and retention strategies. (Kudos to them.) The top advantages of older workers were having more work experience (cited by 77 percent of respondents), being more mature/professional (71 percent), and having a stronger work ethic (70 percent).

Capitalizing on lower turnover

Employers find that workers age 50 and older are more loyal and aren’t as likely as younger workers to job jump. And that lower staff turnover benefits the bottom line, because the costs of high turnover are tangible. Finding, hiring, and training a new employee is a costly venture, and it becomes even costlier when that well-trained employee decides to jump ship and work for a competitor.

Plus, it’s hard to put a price on the institutional knowledge that goes out the door with a departing employee. Now tack on the stress that managers and coworkers must shoulder to make up for the work that falls between the cracks when an employee leaves. And, finally, toss in the toll of lost morale that accompanies the departure of a valued team member. Now the employer has a serious problem. And that’s clearly a big incentive for hiring a worker over 50. Older workers often anchor a team.

RETAINING OLDER WORKERS PAYS DIVIDENDS, TOO

Depending on your position and industry, the total cost of replacing you can range from thousands of dollars to as much as one-and-a-half times your annual salary. Retaining older workers reduces the one-time costs of turnover, which range from $7,400 to $31,700 or more per employee, according to AARP’s most recent survey. This cost includes the time and money that go hand in hand with recruiting and advertising your job, bringing people in for an interview, and training a new hire.

Harnessing the power of highly engaged workers

Aon Hewitt data show that older workers, in general, love their jobs more than younger workers do. Yes, we’re more engaged than our younger counterparts. Perhaps we’re grateful for the jobs in a way that someone new to the workforce has yet to learn to value and appreciate.

For example, 65 percent of employees age 55 and up in large companies are “engaged,” compared to fewer than 60 percent of employees under age 45. Although this gap may seem small, it represents a statistically significant difference in engagement that can have a noticeable impact on business outcomes, according to the AARP report.

In addition to being the most highly engaged age group in the labor force, workers age 55 and older are also the most motivated. A whopping 81 percent of workers age 55 and up are “motivated” — meaning they say that they exert extra effort and contribute more than is normally required in their job — compared to 76 percent of their peers age 25 to 34. Talk about selling points for older workers on the job hunt!

Reaping additional benefits

In addition to all those wonderful attributes already mentioned, older workers typically have the following:

Ability to make quick decisions and solve problems

Greater maturity and professionalism

Superior communication skills, both written and oral

Ability to serve as mentors

Critical qualities of reliability and dependability

More knowledge, wisdom, and overall life experience

Shoulders back. You’re valued. Put all this positive juju in your back pocket and never forget how much you have to offer on the job.

Tallying the Benefits of Staying in the Workforce

To get you even more fired up about your job search, here are five money-wise reasons to stay in the workforce as long as you can:

The more years you contribute to your retirement plans, the better off you’ll be down the road. You’ll be able to delay taking Social Security, which will dramatically boost your eventual payout. If your full retirement age is 66, for example, and you start collecting at age 70, your monthly check will be 32 percent higher than if you begin benefits at 66 and 76 percent more than if you start taking benefits at 62 (when most people do).

The longer you work, the longer you delay tapping retirement funds, which can continue to grow.

Working longer provides income to pay for health insurance until you’re eligible for Medicare at 65. Fewer employers are offering their retired workers medical benefits, and those who do are ramping up the amount retirees must contribute to the cost of coverage. Even better, you may find a job that offers you access to a health plan.

Consider the advantage of a health savings account (HSA). If your employer provides one, take advantage of it. It’s a good way to save as a tax deduction and use the dollars tax free for qualified medical expenses.

Money aside, you may want to keep working to maintain a sense of well-being.

For people over 50, being engaged, not just involved, is important, according to a report by The Sloan Center on Aging & Work at Boston College. Similarly, when asked about their life and careers, 75 percent of people in their 40s and 50s said they want to make their life more meaningful, while 82 percent said they want to give back more, according to a study commissioned by Life Reimagined, which was created by AARP to help people with midlife transitions. Nearly 30 percent plan to make a career change in the next five years; top reasons include having the opportunity to learn more and giving more back to the community. Work gives you a sense of purpose and of feeling connected and needed. It makes you feel relevant. Pinning a dollar figure to that is difficult, but it’s real.

Work sharpens the mind.

Researchers from the RAND Center for the Study of Aging and the University of Michigan published a study showing that cognitive performance levels decline faster in countries that have younger retirement ages. What? Brain cells dying from lack of use? You bet. It’s the old “Use it or lose it” axiom. Many aging experts say that to stay healthy, older adults have to learn new things, stay active socially, and exercise.

Bottom line: We’re living longer, healthier lives. As a result, we’re staying longer in the workforce because we can and often because we need to in order to have a financially secure retirement.

Reorienting Yourself to Today’s Job-Search Realities

What’s new since your last job hunt? If it’s been a while, you’ll quickly find that technology has made job searching easier in some ways but more complex than ever in others. Although the Internet has improved access to openings, it has also increased competition for those same openings. Typically, an average of more than 250 résumés are submitted for every job posting, and the first résumé appears within 200 seconds of the posting “going live,” according to online job-search expert Susan P. Joyce, publisher of WorkCoachCafe.com.

Although job-search sites make finding jobs easier, online applications and automated screening technologies pose additional obstacles to getting past the gatekeepers. According to a study by job-match site TheLadders (www.theladders.com), many companies use talent-management software to screen résumés, weeding out up to 50 percent of applications before anyone ever looks at a résumé or cover letter.

Little wonder then that a recent CareerXroads survey shows that only 15 percent of positions were filled through online job boards. So visiting job boards and applying for jobs is probably not the best use of your time, even though you feel like you have to. Most jobs are either filled internally or through referrals. Yes, the old-fashioned way. In fact, only about half of the roughly 5 million jobs now open in the United States are ever advertised publicly. Employers still prefer to hire people they know either directly or indirectly through a referral. In studies of many different employers going back to 2001, employee referrals are the top source of people hired into a company — not job postings. In fact, employee referrals provided more than 55 percent of the hires in one of the studies.

In other words, employers want to hire someone who has already been vetted in some way, which can save a lot of hassle and cost of the hiring process and of replacing people who don’t work out, even if they looked great on paper and interviewed like pros. Employers love it when someone who already works for the organization can vouch for the person. And the employee making the referral often has some skin in the game, so to speak. Many employers pop a bonus reward of up to $1,000 or more for referring someone who’s hired and does a good job in the first few months on the job.

Does this mean that applying for a job on job boards isn’t worthwhile? Not at all! Scanning the boards gives you a sense of who’s hiring, what types of openings are out there, and salary ranges. But it does mean that other approaches, such as networking and marketing yourself, may ultimately forge a better route to landing a job.

Deciding What (Else) You Want Out of Work

For many, their paychecks aren’t generally what get them juiced about going to work. Most people say they’re motivated by the people they work with, the opportunity to keep learning and growing, or the mission or cause of their employer’s services or the products it makes. Sometimes they say they love the travel opportunities. So don’t get locked into a must-have salary. When searching for jobs and comparing offers, be sure to account for other benefits, including the following:

Flexible workday:

Being able to work from home or having flexible hours or a compressed schedule are biggies. It comes down to being treated as a responsible adult and weaving work more seamlessly into the fabric of your life. And that may be getting easier to achieve. A Bank of America Merrill Lynch survey of 650 human resources executives recently found that half of employers are willing to offer flexible arrangements, such as working part time or job sharing, to their most skilled and experienced workers.

Healthy work-life balance:

Three in five people interested in a second career midlife say it’s very important that the job leaves free time for things they want to do, such as travel, education, or engagement in other activities they enjoy, according to a report by Encore.org, a nonprofit organization that’s building a movement to tap the skills and experience of those in midlife and beyond to improve communities. Indeed, many of those interested in encore careers appear eager to mix fewer hours of work per week with more years of work in total. Finding more flexibility may make working a few more years more palatable.

Meaningful work:

More than 25 million Americans 50 to 70 years old are eager to share their skills, passions, and expertise in encore careers that address social needs, typically in education, healthcare, human services, and the environment, according to a 2014 study by Encore.org and Penn Schoen Berland. Of those 25 million, more than 4.5 million are already working for social impact. Another 21 million are ready to join them within the next five years.

Opportunities to interact with others and stay productive:

Human beings are hard-wired to create, produce, and collaborate, and rewarding work provides opportunities to remain active and productive. A Pew Research Center survey found that working for non-financial reasons, such as job enjoyment or the desire to be productive, increases with age.

Competitive benefits:

An AARP/SHRM survey of workers age 50 and up suggested older workers place significance on having competitive benefits and flexible work arrangements. When these workers consider a job offer, health insurance, retirement savings plans, and paid time off benefits play an important role in their decisions. For example, approximately eight in ten workers age 50 and older consider the availability of benefits such as health insurance (82 percent); a pension, 401(k), or other retirement plan (77 percent); and paid time off (80 percent) to be “very” or “somewhat” important considerations in the decision to accept a job.

Learning opportunities:

Boomers tend to be curious, eager, and adventuresome. They’re not geared to be couch potatoes passively absorbing entertainment. As such, they value learning opportunities both on the job and through employer-sponsored continuing education programs.

Employers are increasingly tuning in to these incentives. So though they worry that they may not be able to meet your salary expectations, they’re discovering that workers 50 and older are attracted to more than pay. So employers are increasingly offering such non-financial perks as flexible work schedules, telecommuting options, and training and education opportunities.

Pursuing Your Passion and Finding Purpose

When it comes to finding a successful and meaningful second act, most people simply don’t know what they’re passionate about, even when they know that they want to move in another direction. This section encourages you to explore other careers and check out some of the fastest-growing job markets to find the right fit. It also provides some tips and cautions to help guide you as you set out to pursue your passion and add purpose to your life.

Pursuing your passion is fine, but you don’t want to end up in the poorhouse doing it. Look for ways to align your passion with what’s in demand.

Considering other careers

One way to discover a passion that you can transform into gainful employment is to consider other careers. If you’ve ever thought to yourself, “I’d like to have her job,” you have a head start. Think about those jobs you’ve always dreamed of having. Maybe you’ve always wanted to be a writer, graphic artist, wedding planner, interior designer, private investigator, or sports announcer. Perhaps you’ve always dreamed of owning a bed and breakfast, brewing your own beer, making candy, or producing movies.

No, it’s not too late to start thinking about pursuing a totally new career, and many your age have done so successfully. Think of it this way: If you live to 100 and look back 50 years or so, will you still think you were too old back then to pursue that dream job?

Start now. Pursuing a new career is likely to require a significant commitment of time, money, and effort. The longer time frame you have to plan, the better. Start working at age 50 on a career you might not get around to until age 60. You can start now to research a career you’re interested in, take classes, and perhaps even secure an internship in the field to take the new career for a test drive to gauge your true interest in it before going all in.

Test-driving a career in some form is always a good idea. Career changers may enter a period of mourning after starting their new careers. All of a sudden, they realize how much they miss their old careers and aren’t really open to replacing what they once had. Internship opportunities are one way to test-drive different work.

Money is the biggest roadblock for most career changers. When you start over in a new field or move to a nonprofit, chances are you need to take a salary cut at least initially. If you have an emergency fund to buy you time, you can do a more thoughtful job search. If you need to, pare back your discretionary living expenses to reflect a more realistic view of what you’ll earn. See the later section “Navigating a career change” for details.

FINDING INSPIRATION IN SUCCESS STORIES

Many people find that their passion is something they did when they were younger, often in childhood.

One woman moved from working in a management position at an insurance company to launching her own business making pillows out of old wedding dresses and crafting other customized pillows and quilts. When Marilyn Arnold was 9 years old, her mother, a skilled seamstress, patiently taught her to sew on a vintage Singer treadle sewing machine. As her feet pumped away at the machine in her family’s farmhouse near Paris, Missouri, she was smitten. “I was in love with sewing, even when I stuck my finger and it bled,” Arnold told me. But she never dreamed that now, at the age of 66, she would be running her own small business, Marilyn Arnold Designs, in Lee’s Summit, Missouri.

Bill Skees has been a bibliophile for as long as he can remember. His favorite haunt growing up in Midland, Texas, was a bookstore called Miz B’s. “I’d look at her behind the counter and think, ‘That’s got to be the greatest job in the world.’” In the decades that followed, Skees crossed the country for various jobs in IT, most recently heading development for a gaming company. But the work was stressful, and every chance he got, he slipped off to a bookstore. All the while, he dreamed of opening his own shop. And at 56, he did. He now owns and manages Well Read Books in Hawthorne, New Jersey.

Someday, you’ll be able to add your success story to this list.

Checking out fast-growing job markets

One way to pursue your passion while ensuring your marketability is to consider employment in fast-growing markets. Certain industries, such as energy and healthcare, are experiencing more profound talent shortages than others. According to the ManpowerGroup’s 2014 Talent Shortage Survey, here are the top ten jobs that U.S. employers are having trouble filling:

Skilled trades (welders, electricians, machinists, and so on, prevalent in construction and manufacturing)

Restaurant and hotel staff

Sales representatives

Teachers

Drivers

Accounting and finance staff

Laborers

IT staff

Engineers

Nurses

Occupations with the most robust job growth by 2022, according to the Bureau of Labor Statistics (BLS), range from personal care and home health aides to interpreters and translators, brick masons and stonemasons, electricians’ helpers, and event planners.

Although most of the job growth is expected to be in fields that don’t require postsecondary education, jobs that require a college degree or higher are actually growing faster (14.0 percent versus 9.1 percent). And those higher-skilled jobs will pay, on average, more than double ($57,770 per year versus $27,670).

The following sections describe the sectors that are likely to be the hottest over the next few years.

Look for jobs and opportunities that leverage experience. Check out job websites, including www.aarp.org/work, encore.org, www.Job-Hunt.org, retiredbrains.com, and Workforce50.com to get a flavor for what others are doing and what jobs are out there now.

Healthcare

Look for opportunities in healthcare support, such as nursing assistants, physical and occupational therapists and assistants, skincare specialists, physician assistants, genetic counselors, and social workers. According to projections released by Georgetown University in 2015, the United States faces a shortage of 193,000 nursing professionals by 2020. Additionally, a 2015 report from The Association of American Medical Colleges estimates that, by 2025, the United States will experience a shortfall of anywhere from 46,100 to 90,400 physicians. Here again, recruitment and retention efforts aimed at the 50 and older workforce can help address this shortage.

According to the BLS, occupations related to healthcare, healthcare support, construction, and personal care services, such as physical therapists, skincare specialists, and social workers are expected to add a combined 5.3 million jobs in the United States, an increase representing approximately one-third of all employment gains over the coming decade.

The dietitian, nutritionist, and nursing assistant occupations are each projected to grow 21.1 percent between 2012 and 2022, according to BLS data. Given the comparatively small size of the dietitians and nutritionists profession, projected growth is expected to result in the addition of 14,200 new jobs. The nursing assistants occupation, however, is far larger. The upshot: The same anticipated growth rate in that occupation is expected to add 312,200 new jobs to the economy by 2022.

Leisure and hospitality

The leisure and hospitality sector is growing. People will be spending money to eat out and go on vacation. Chefs, cooks, waiters, bartenders, and restaurant and hotel managers will be in demand.

Software development

The software developer and programmer sector is expected to add 279,500 jobs by 2022, accounting for about four out of ten new jobs in the computer and math occupations group, according to BLS.

Cybersecurity

Although projected growth in jobs for information security analysts, at 27,400 new positions, is tiny compared to jobs for software developers and programmers, the rate of growth for information security analysts is expected to be 37 percent, making this the fastest-growing job in this sector.

Engineering

According to 2013 Current Population Survey data, 22 percent (or 447,000) of engineers in the United States are age 55 and up. As these workers approach retirement age, there may not be enough new workforce entrants to replace their loss in key roles. Focused efforts to retain and recruit older workers can mitigate these gaps.

Skilled labor

BLS projections show that considerable job growth is expected in skilled labor professions, including brick masons, block masons, stonemasons, and tile and marble setters (and their helpers), and electricians’ helpers. As mentioned earlier, employers are currently having the most trouble filling openings in these and other skilled trades.

Translators

For those who speak foreign languages, labor experts also project that there will be a rising need for interpreters and translators in courtrooms and other settings.

AARP EMPLOYER PLEDGE: EXPERIENCE VALUED

The AARP Employer Pledge: Experience Valued program (www.aarp.org/work/job-search/employer-pledge-companies/?intcmp=AE-WOR-MAIN) is a national initiative to direct job seekers to employers that value and are hiring experienced workers and help employers solve their current and future staffing challenges. Employers who sign the pledge agree that they will do the following:

Recognize the value of experienced workersBelieve in equal opportunity for all workers, regardless of ageRecruit across diverse age groupsConsider all applicants on an equal basisHave immediate hiring needs

More than 460 employers have signed the pledge, including AlliedBarton, American Red Cross, AT&T, Charles Schwab, CVS Caremark, General Mills, Google, Kimberly Clark, Manpower, National Institutes of Health (NIH), New York Life, Scripps Health, S&T Bancorp, Toys “R” Us, United Health Care, Walgreens, and WellStar Health Systems.

Taking the first steps in pursuing your passion

“Pursue your passion” is the kind of advice you receive from a friend or relative who either never pursued her passion or knew from the day she was born what she wanted to do. It sounds like great advice until you pause to think about it and realize that you have no idea what your passion is or how to take that first step from point A to point B. Here are some suggestions to ease you into those first steps, with a tip of the hat to career coach Beverly Jones:

Find a place to start.

You don’t need a precise definition before you get going. Start by making a list of what you want in the next phase of your career. Don’t look for a perfect path or ideal starting point.

Get things moving by taking small steps.

Get moving in the general direction of where you want to go. One small step may be calling someone who works in a field that appeals to you to discuss possibilities.

Silence your inner enemy.

If you have a negative refrain that goes through your head and sabotages your efforts to make a change, such as, “I’m too old to do that,” make note of it. Write that thought down in a notebook and reframe it with a positive thought, such as, “I have these specific skills, and I’m going to use them in a new career.” You need to get rid of that old blocking message to move forward with your dreams.

Ask the basic questions.

Does your second act fit your lifestyle? Can you afford it? What does your partner think? Ask yourself how a certain career will work with your social life, your spending habits, and your family situation. It will help you to dig deeper and get a clearer picture of what you truly want in your life and your options to get there.

Keep a journal.

Journaling is a great way to map your new career direction. Make lists: the best times in your life, the things you really like, the experiences you’ve enjoyed, what you’ve excelled at, the best moments in your current career. These lists will help you hone in on your passion and visualize yourself harnessing it to pursue something new and exciting.

Get a business card.

Want to be an artist but still working as a lawyer? Get an artist’s business card. As soon as you have a card, it makes the career real. You can get your second-act card long before you finish your first act. Printing your new information on a card can be transformative.

Have a mental picture of where you want to go.

Tape a photograph to your office wall of what your new career might look like. Or create a collage. Journal about your goals.

Be practical.

You may need to upgrade your skills and education, but take one class at a time. You can add more classes as your direction and motivation become clear.

Get your life in order.

Get physically and financially fit. Change is stressful. When you’re physically fit, you have more energy. Less debt gives you more choices. Debt is a dream killer. With your finances in order, you have more options. You can be more nimble.

Don’t ruin your hobby. For example, you may love to garden, and you may start thinking about becoming a landscape designer. But you may also quickly realize that you’re lonely in the garden all day; you actually prefer working with people. Gardening is a great hobby and escape from work, but it wouldn’t be the right career move for you (in this example). Make sure that you think hard about how your passion will look and feel as a career.

Putting Proven Success Strategies into Practice

You’re not the first person to be looking for a job later in life, and that’s good news for you. Others have led the way from unemployment to rewarding work in their 50s and beyond. And although these trailblazers haven’t beaten down a path for you to follow (because there are so many paths to follow), they have revealed some strategies and techniques that have survived the test of time. The following sections introduce you to several of the more effective strategies for securing employment, most of which apply to all job seekers, but a couple of which apply specifically to job seekers age 50 and older.

Starting sooner rather than later

The sooner you start looking for a job after losing a job, the more likely you’ll find a new job. According to the AARP Public Policy Institute report “The Long Road Back: Struggling to Find Work after Unemployment,” by Gary Koenig, Lori Trawinski, and Sara Rix, those who waited three months or longer before beginning their job search were less likely to have become reemployed.

Why wait so long to look for work? The most popular answer was that they needed a break. Other reasons survey respondents cited include that they took time to think about what they wanted to do next (57 percent), had savings or other sources of income (56 percent), and found it hard to get motivated (42 percent). Twenty-five percent of respondents waited to begin their job search because of caregiving responsibilities, about the same number who waited because they didn’t know how to get started. Whatever the reason, postponing the search for three months or longer worked against them.

Giving yourself a full-body makeover

Being physically fit, well groomed, and properly dressed is better than Botox. Aim to look and dress with an eye toward a vibrant, youthful appearance:

If you aren’t physically fit, make that a priority. Eat healthy, avoiding sugary and starchy foods and sugary drinks. Exercise at least 30 minutes every other day. Quit or cut back on caffeine, nicotine, and alcohol, if you’re so inclined to use those substances.

Maintain a well-groomed appearance. Get a haircut. Try a new ’do to give yourself a fresh look.

Spruce up your wardrobe.

Get the right look for the job that you’re seeking. Free personal shoppers are available at many department stores to help. Or you can also ask friends for tips on looking your best. If you wear glasses, consider getting contacts, Lasik surgery, or new glasses with more contemporary frames.

People do judge a book by its cover. Showing up for an interview looking vigorous, well groomed, and sharply dressed demonstrates that you’re up for the job and have the requisite stamina, which is often a concern for employers when they consider hiring someone over 50. This advice also applies to any headshots you use for your social media and networking profiles.

Using the most effective means to get a job

When reemployed workers were asked about the most effective steps they took in finding their current jobs, the overwhelming majority attributed their success to networking, according to the AARP’s “The Long Road Back: Struggling to Find Work after Unemployment.” Here are the most effective steps:

Reaching out to a network of contacts

Asking relatives and friends about jobs

Contacting employers directly

Using a headhunter

Consulting professional associations

If you’re interested in a particular industry, join an association connected with it and seek out volunteer openings. Go to industry and professional meetings and conferences. You never know who will know someone who is hiring. And many college and university career centers are reaching out to alumni to help, too.