The break between your midlife work and your encore career can be as short as a weekend or as long as several years. Either way, planning ahead can increase the chances for a successful encore career and save you some money as well

Of course, the cost of an encore transition depends on its length, as well as your living expenses . You’ll also have to budget for education and training you want or need, travel and other business-related expenses, and any fees for certifications and tests

The key thing to remember is that an encore transition is an investment – in yourself. Since as few as two additional years of work are enough to salvage many retirement financial plans, taking the time to plan and prepare for the kind of work you really want to do is a prudent move, particularly if it enables you to be happy working longer.

Get paid to make a switch. National service programs such as Peace Corps or VISTA can get you started in a new career. VISTA members serve full-time for a year at a nonprofit organization or government agency, working to fight illiteracy, improve health services, create businesses and strengthen community groups. They receive a modest living allowance, health care and a tuition award worth $4,725 (or $1,200 in cash).

It's not much, but Gary Maxworthy, who had spent three decades in the food distribution business, used a one-year stint as a VISTA volunteer at the San Francisco Food Bank to develop a play to distribute fresh food to low-income families. That led to the launch of Farm to Family, which this year distributed approximately 60 million pounds of fresh fruits and vegetable through California food banks.

An increasing number of companies are helping to subsidize encore transitions as well. IBM’s Transition to Teaching defrays employees' costs of schooling and certification up to $15.000, and provides paid time off to fulfill student teaching requirements. In California, a dozen major corporations have joined the EnCorps Teacher Initiative, and provide $15,000 to help employees become math or science teachers. And the Pentagon's Troops to Teachers program offers bonuses of up to $10,000 for retiring military officers and enlisted personnel who go into teaching.

Even being downsized can have its upside. Ford, for example, includes a tuition benefit in some of its buyouts. After 13 years on a Ford assembly line, Terry Ramey took an education buyout package that includes $15,000 a year for tuition and half his annual wages for four years. in buyout He’s in a four-year nursing program that combines two years at a community college and two years at the University of Michigan.

Tax breaks and incentives. Even if you can't have your costs covered up front, you may be able to get school loans forgiven later, or at least get a tax break. The Education for Public Service Act reduces monthly payments on federal student loans for graduates who work in public safety, public health, education, social work or the nonprofit sector. The legislation provides complete loan forgiveness for graduates who work full time for 10 years in such public service.

There also are a variety of tax incentives for education. Some boomers are financing their return to school with after-tax "529" college savings accounts that were intended for younger students but have no age restrictions. The accounts allow investments to be withdrawn tax free, as long as the proceeds are spent on higher education. Legislation that has been introduced in Congress would go further, enabling individuals and employers to contribute as much as $2,500 per year into a tax-free "Lifelong Learning Account," with as much as $750 refunded through a tax credit.

Tap your retirement assets. Of course, retirement funds can also be used to fund encore transitions. Some financial advisers advise splitting the funds into two buckets: an encore account and long-term retirement savings. The encore funds could be used to provide income during an encore transition, or supplement pay throughout an encore career, while the long-term assets are left to accumulate longer. New “retirement income” financial products, such as "managed payout" accounts and variable annuities with living benefits, can help meet these needs.

"You can split your portfolio and carve off a portion to support your income over a period of time," says Ken Hevert, vice president of retirement income product management for Fidelity Investments. "Over 10 years, it might cost you $75,000. But it's going to free up the rest of your portfolio so you're able to replenish the part you peeled off."

For those with at least a few years before the planned break, it may make sense to create a special "encore account" separate from retirement or other savings. An individual able to save $500 a month might want to put $100 into an encore account and $400 into long-term retirement savings, says Fred Mandell, a veteran financial services executive. As he says, "You're reinvesting in yourself."