5 top encore careers – and ways to pay for the retraining you may need

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Continuing your education late in your career can open up new opportunities
Reinventing yourself sometimes requires re-educating yourself. Consider these ways to pay for your encore education.
College campuses are getting more diverse — agewise. Nearly a million Americans aged 45 and older were enrolled in college undergraduate and graduate schools in 2016, according to the U.S. Census Bureau. They're not going back to study Plato. They have a more practical goal in mind: getting a degree and increasing their skills as they transition to second or third careers.
College degrees can come with a high price tag: For the 2017-2018 academic year, tuition and fees at private, nonprofit four-year schools rose 3.6% to $34,740, according to the College Board. And tuition costs are just the start. Going back to school may require you to take a leave of absence from your current job, and the cost of books and transportation can add up. But there are ways to manage these educational expenses without disrupting your financial planning.

Finding the money

"Returning to school inevitably involves some costs and tradeoffs," says Richard J. Polimeni, director of Education Savings Programs for Bank of America Merrill Lynch. "You may have to adjust your priorities and find places to trim expenses so that you can afford to go back to school." If the program or specialty you want to pursue involves a large financial commitment, you may also want to explore the following three funding options, Polimeni says.
A 529 college savings plan. A little-known fact: These college savings plans are not just for college-bound teens. A 529 college savings plan can be started to support your own continuing education goals, too. In fact, if there's money left over from the 529 college savings plan you created for a child or grandchild after they've graduated, you can change the beneficiary to yourself.
Starting a 529 college savings plan for yourself may not make sense if you're planning to enroll in school in the next year or so. But for those with, say, five years of lead time, it may be worth considering. "The main advantage of a 529 college savings plan is that any money you contribute can compound tax-free," Polimeni says. "And, assuming you use it to pay for tuition or other eligible expenses, your withdrawals are tax-free as well."Footnote 1
If there's money left over from the 529 you created for a child or grandchild who has now graduated, you can change the beneficiary to yourself.
Leveraging your investments. You could trade in some of your investments to cover your tuition. But doing so risks putting a dent in your investment strategy. There is an alternative offered by some financial institutions — a secured line of credit. Here's how it works: Much as you use the equity in your home as collateral when you take out a home equity line of credit, your investments are used as collateral to establish a flexible line of credit. Such accounts provide access to money as you need it, often without application or maintenance fees. Lines of credit that leverage your investments as collateral do entail risks, Polimeni says. But this strategy can allow you to maintain your current investment strategy without disruptions.
Each of these choices has advantages and disadvantages; it's best to review them with your personal professional advisors as you look for ways to free up cash to help you meet your new educational and career goals.

Help wanted: 5 top encore-career fields

How can you put your skills and expertise to best use in your second act? Use this list as a thought-starter.
  • Health Care: Jobs range from patient advocate to nurse and physical therapist.
  • Green-collar jobs: Think engineering to landscape architecture and the construction trades.
  • Government: Everything from management skills to technical expertise is sought after on the local, state and Federal levels. Is a run for mayor — or Senate — in your future?
  • Nonprofits: Could you be a good fund raiser for your favorite charity?
  • Education: Many executives find their corporate skills and experience carry over well to teaching at the high school and college levels.
Source: Encore.org, 2017

Footnote 1 To be eligible for favorable tax treatment afforded to any earnings portion of withdrawals from Section 529 accounts, such withdrawals must be used for "qualified higher education expenses," as defined in the Internal Revenue Code. Any earnings withdrawn that are not used for such expenses are subject to federal income tax and may be subject to a 10% additional federal tax as well as state and local income taxes.

The investments or strategies presented do not take into account the investment objectives or financial needs of particular investors. It is important that you consider this information in the context of your personal risk tolerance and investment goals.

Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.

Before you invest in a Section 529 plan, request the plan's official statement from your Financial Solutions Advisor and read it carefully. The official statement contains more complete information, including investment objectives, charges, expenses and risks of investing in the plan, which you should carefully consider before investing. You should also consider whether your home state or your designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds and protection from creditors that are available only for investments in such state's 529 plan. Section 529 plans are not guaranteed by any state or federal agency.

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