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Financial planning

Career change at 60: Tips to do it right

4.15.32 Mature man and woman looking at their phones
Maskot/Getty Images/Maskot

Sometimes, you just need a career change. And if the opportunity arises to secure a more rewarding job or better work conditions, you want to jump at it. But making a change can be intimidating, especially in your 60s. There are many things to consider later in life, as you might have more at stake than, say, a 25-year-old exploring different career paths.

The good news is that it is possible to make a successful career change at 60. You can use life experience to your advantage in almost any position, and you probably know yourself better than you did in previous decades. While some career-related advice is timeless, this career move deserves extra attention in your 60s. With a job transition plan, you can move seamlessly into your new role.

Start with the end in mind

Changing jobs can take time and energy, so it's important to be patient while you figure out what the perfect fit looks like for you. Start by researching work conditions and pay ranges in your field to understand the day-to-day experience and how any opportunities align with your needs. If you're motivated by growth and advancement, explore how your career path might unfold in the coming years.

Informational interviews are an excellent resource for this phase of life. You can learn a lot during short discussions with people who already do what you want to do (or who have inside knowledge of the industry). Plus, you can potentially accelerate your job search—if somebody is hiring, they might just offer you a position due to your curiosity and initiative.

That said, the best motivation for informational interviewing is to gather knowledge and make connections. From there, you'll have the full picture as you make these hard decisions.

The job search

At this point in your life, you might be well-versed in how to manage a career. But perhaps you're a bit rusty on the process of changing jobs. As you might imagine, online tools can play a big part in your career transition.

If you haven't already done so, complete the essential tasks for a job search. Brush up your resume, highlighting skills and experience relevant to your new career. Social media profiles can also be important, although that depends on various factors. If you have a LinkedIn profile, update your listing to reflect your strengths and background. And for any other social networks (especially if they're public-facing), make sure you're putting your best foot forward in case hiring managers search for you online.

Let others know about your job transition plan. It's often helpful to notify friends and family, as well as any colleagues who might be able to open doors in your new career. Applying for positions online can also be helpful. With a combination of strategies, you're more likely to get your foot in the door somewhere.

Self-employment could also be an option, although it's not right for everybody. If you go that route, you control your schedule and who you work with, which can be satisfying. However, you're also in charge of administrative tasks, including your own health care and retirement benefits, and income isn't always immediate or regular.

Financial essentials to consider when changing jobs in your 60s

It's critical to be smart about money as you make a career change at 60. The decisions you make can have an impact on your household's financial security as well as your retirement income. Plus, health care and other benefits you're used to might depend on your job. Here's how to get your finances in order and explore all avenues before you make a decision.

Safeguard household finances

Start by making sure you and any family members will be financially secure. It's always wise to have emergency savings on hand, especially as you start a new career. Being a new employee or new business owner can potentially bring more risk, so that safety net can provide psychological comfort and funds for any surprises. If you'll take a pay cut when you change jobs, evaluate the impact on your household budget, making sure you and your loved ones  will have sufficient resources .

Manage assets wisely

If you have savings in a workplace retirement plan, decide how to handle those assets. After leaving your current job, you might have several options, and it's important to choose wisely when your life savings are at stake. You might leave the money where it is, roll assets to a retirement account that you control, or move funds to your next job's retirement plan.

While cashing out is also an option, the pre-tax contribution would be taxed as income and you would wipe out the progress you've made so far. Plus, with decades of work behind you, you likely have a substantial amount saved, and the tax consequences could be significant. A careful analysis of  your options  and your finances can help you make the right choice. Ideally, you can continue moving forward on your financial goals—and avoid losing ground—during this transition.

Continue retirement savings

You may also have to choose how to save for retirement in the coming years. A new job might require you to wait before you're eligible for the new employer's retirement plan, so what are your options in the meantime? Depending on your income and other factors, it could make sense to save money in accounts like IRAs and brokerage accounts, among others.

If you start your own business, you'll have additional options, such as  small-business retirement plans . Individual 401(k) plans, SEP IRAs, and other programs allow for significant contributions, and they may offer other features.

Plan for health care

Health care is increasingly important as you age, so it's crucial to understand your benefits. Out-of-pocket costs could change, so be sure to examine your new coverage carefully. Remember that you might be able to join a spouse's health plan, if that makes more sense, or continue your current coverage temporarily. At age 63 your income can affect future Medicare premiums, so start thinking of how health care might work in retirement.

Consider the pros and cons of different coverage options, including high-deductible health plans. Those plans tend to have low premiums, and they typically allow you to contribute to a health savings account (HSA). If you're eligible for HSA contributions, you can potentially save on taxes by adding money to your account before taxes, and the funds grow tax-deferred. Then, if you withdraw money for qualified medical expenses, you might be eligible for tax-free withdrawals.

The bottom line

Making a career change at 60 can be rewarding both personally and financially. But it can also be scary (that's true for most life changes). At this stage in life, with more time and likely more money invested, you have more to lose than when you were younger. Fortunately, you probably have more wisdom to make smart choices. Take some time to gather information as you explore this transition, and begin taking steps toward your next career.

And remember, you don't have to do everything alone. An outside perspective is often helpful, and financial experts might share ideas or identify issues that have a big impact on your household finances. Consider speaking with  a financial advisor  who can guide you and help you make a game plan as you move into the next chapter of life.

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