Editor’s note: The following article by David Bank, vice president of Civic Ventures, appears in the Fall 2009 edition of Generations, the journal of the American Society of Aging. See below for more information about the issue.

The Great Recession is over, the chairman of the Federal Reserve and other officials have declared. It might not feel that way to the 10 percent of Americans who are officially unemployed, including the more than 2 million out-of-work Americans over age 55 whose ranks have more than doubled in two years.

If it’s back to business as usual for bankers and traders, it’s anything but for those at or near what used to be called retirement age. Nearly two-thirds of those ages 50 to 61 expect to delay their retirement because of the recession, according to a recent study by the Pew Research Center. Nearly four of every 10 adults who are still working at age 62 have already delayed their retirement plans.

The loss of nearly $3 trillion in retirement assets since September 2007 has turned what once was hotly debated into conventional wisdom: Most Americans, of all income brackets, will work longer, not only longer than their own earlier expectations, but longer than recent generations have worked.

For many, working longer will mean not just a few more years on the job, but a whole new stage of work in later life. And for many of them, that stage could be long enough to provide a chance to change their priorities, live their values, fulfill their dreams, or leave their legacy; that is to establish “encore careers” that combine financial security with personal meaning and social impact.

With jobs of any sort scarce for older workers, it may seem paradoxical to predict that this downturn will establish encore careers as the new norm for the period between the end of our midlife careers and the advent of true old age. And it sounds downright pollyannaish to suggest that older adults could play a key role in the response to national challenges, in education, health care, environmental sustainability and other urgent areas.

The only thing more outlandish would be to expect the revival of the late-20th-century-model of ever-earlier retirement spent entirely in the pursuit of leisure.

Indeed, the economic crisis has accelerated the emergence of the encore career by driving a stake into the heart of the old vision of the Golden Years. Traditional retirement – which itself was invented only in the 1940s and 1950s – was in decline well before the current meltdown. Secure pensions have been replaced by inadequate 401(k) and IRA savings. Retiree health insurance coverage has faded while out-of-pocket health care costs have soared. Even without additional benefit cuts, Social Security is set to replace an ever-smaller percentage of preretirement income. The Pew survey found that financial worries spanned the economic spectrum, with 69 percent of those with family incomes under $30,000 and 76 percent of those with incomes of more than $100,000 saying the recession is making it harder to take care of their retirement finance needs.

All that has produced a near-consensus that longer working lives are the most practical way to restore a semblance of personal financial security, and perhaps save the federal treasury as well. As Alicia Munnell and her colleagues at the Center for Retirement Research at Boston College point out, working even two to four additional years increases current income, boosts both 401(k) balances and Social Security benefits, and reduces the number of years to be covered by retirement savings, all of which can dramatically increase standards of living.

But there is little consensus among policy makers and experts about how to restructure institutions to encourage such a result. For individuals, the urgency of finding a job, restoring lost income, or salvaging life savings often means short-term crisis management trumps long-term personal planning and priorities. Claims for Social Security benefits at the early retirement age of 62, for example, have been surging, a reflection of the immediate financial pressure facing millions of older adults.

As economic growth gradually returns and short-term responses give way to long-term thinking, however, we have an opportunity to reshape the job market for older adults around a new vision of personal success and social impact.

If economic necessity is the push toward longer working lives, social purpose is a pull. The 2008 MetLife Foundation/Civic Ventures Encore Career Survey found that between 6 percent and 9.5 percent of Americans ages 44 to 70, or between 5.3 million and 8.4 million people, are already in their encore careers, even if they don’t yet use that term. Of those people not already in encore careers, 50 percent said they want to use their talents to improve society by working in public service or the nonprofit sector, in education, health care and similar fields. That is, more than half of the huge baby boom population have or want to have social-purpose encore careers, and interest is even higher among younger boomers, ages 44 to 50.

Chuck Spayne, 59 years old, embodies both the challenge and the potential. In April, Spayne was laid off from Intel Corp., where he had worked for 27 years, mostly fixing and installing heating and cooling equipment at Intel’s facilities. “I thought I would retire there,” he says.

Getting little response to his job inquiries, Spayne rekindled an earlier interest and enrolled in a two-week solar-energy training course. The growth in clean energy, he figures, will create opportunities. Rather than become an installer himself, however, Spayne now plans to use his job experience and building skills to train inner-city youth for green-collar jobs. “I love to teach,” he says. “You teach them something new, and they in turn come back and teach you.”

The new vision of work will obviously vary by age and circumstance. For people who are employed, the most sensible response to the loss of savings or home equity is probably to remain in their current jobs for a few more years. But for those contemplating seven, 10 or even 12 more years of work, a career-shift may present an exciting new challenge. And for those not currently working – retirees returning to the workforce after finding their assets stretched too thin, or a worker laid off from a shrinking industry like autos or newspapers – the jump to a new field may be a practical necessity.

As it happens, many of the (few) remaining areas of job growth may be well-suited to encore careers. Hiring in health care, education and government service has held up more strongly than in most other areas, according to the Bureau of Labor Statistics. A chronic shortage of nurses has persisted through the downturn, for example, though many health systems have imposed hiring freezes and some geographical areas have reported gluts. And in schools, where more than half of all teachers – 1.7 million educators – are approaching retirement age, the talent shortage is greater than current recruitment strategies can handle.

Government investment in these areas has the potential to deliver measurable gains against social challenges and to create opportunities. The $787 billion American Recovery and Reinvestment Act steered investments to education, health care and creation of green jobs. The same areas are prioritized in the new Edward M. Kennedy Serve America Act, which envisions a major expansion of national service programs and a new focus on career transitions. An important aspect of the bill is that it targets 10 percent of the anticipated 250,000 AmeriCorps positions for programs that provide opportunities for Americans over age 55, and it includes 500 “encore fellowships” designed specifically for those seeking longer-term encore careers in high-need areas.

The crush of applicants for many second-career teaching programs is another indicator of how people are thinking about their remaining years of work. The new Traders to Teachers program at Montclair State University in New Jersey, which trains laid-off Wall Street finance professionals as high-school math teachers, received 200 application for its first class of twenty five this fall despite the prospect of a steep pay cut compared to what they’d received onWall Street. Collin College, a community college near Dallas, has fielded 900 inquiries about its fast-track teacher preparation programs – twice as many as last year. In California, the EnCorps Teachers initiative recently received more than 1,000 inquiries in a three-month period.

“From my first moment back in the classroom, I have been completely reenergized,” Gordon Jones, a 54-year-old math teach in Greenwich, Connecticut, told The Wall Street Journal . After twenty-seven years on Wall Street, he says, “interacting with the students is a pleasure, and the feeling that you can help them is very satisfying. There are no regrets.”

Social purpose can be seen as a job benefit to offset lower monetary compensation, as can reduced stress and greater flexibility. The AARP Public Policy Institute earlier this year released a study of 1,705 workers who were surveyed over 14 years beginning in 1992. Two-thirds of the workers who changed jobs, or more than a quarter of all the workers, switched occupations. The new careers generally meant significant pay cuts, loss of health insurance benefits or pensions, and reductions in perceived social standing. But the career-switchers reported higher job-satisfaction, with sharp drops in stressful conditions and big increases in flexibility.

The writer Kurt Anderson , author of “Reset: How This Crisis Can Restore Our Values and Renew America,” sees a broader cultural shift, toward simpler lives and practical tangible work. Wikipedia now defines “downshifting” not as something you do in a manual-transmission car, but as “a social behavior or trend in which individuals live simpler lives to escape from the rat race of obsessive materialism and to reduce the stress, overtime, and psychological expense that may accompany it.”

As encore careers become part of this new definition of success, organizations have an opportunity to reconfigure job descriptions to deploy the skills and experience of older adults in new ways. Some encore careers will provide full-time, market-level compensation – for example, for corporate managers who apply their experience to the myriad needs of nonprofit organizations.

But even modestly paid jobs can be a viable economic proposition, particularly if the time frame for an encore career is extended. In a fifteen-year encore career, for example, it’s possible to see compensation as a substitute for retirement income, rather than for peak-level earnings. There’s a solid business case for new kinds of jobs that offer satisfaction, impact, and a level of compensation that may be adequate, if not lavish. Think mentors and trainers who help young people successfully transition to college or the work force, or “health navigators” who can help reduce costs at the same time they improve health outcomes for patients leaving the hospital. By contributing program management, technical expertise, training, and mentoring, baby boomers can expand opportunities for young people, not compete with them for limited job openings and funding.

Encore careers that deliver personal significance, social impact, and job satisfaction can make longer working lives an attractive and accessible proposition for both higher- and lower-income individuals. The new, older working class increasingly includes what marketers have called the “mass affluent,” now stripped of much of their affluence. Even before the downturn, a McKinsey Global Institute study found twenty-four million boomer households approaching retirement with lofty lifestyle aspirations but limited financial resources. Nearly seven out of ten households of people ages 50 to 63 were financially unprepared for retirement, the study found.

But increased institutional and financial support for encore careers for less educated and lower-income workers is particularly important to democratize the “privilege” of working longer in satisfying, purposeful jobs that is already enjoyed by the affluent and educated elites. While lower-income and less-educated workers may need the continued income more, numerous studies have shown that they are less able to continue working, both because of increased health problems and because of reduced demand for their skills. As of December 2008 men age 55 and older who did not complete high school were more than twice as likely to be unemployed as those with some college education . The scarce availability and high cost of health insurance is a major impediment to encore careers, locking many people in jobs they are otherwise ready to leave, or limiting their choices to new jobs that provide such coverage.

Regardless of the circumstances, it’s rarely easy to move from the end of a midlife career to an encore career. Transitions typically require time and training or preparation of some kind, plus financial resources.

A variety of institutions are starting to respond to these challenges. Dozens of community colleges, for example, have established encore career transition programs to help boomers retool their skills for high-need areas. The stimulus bill included an additional $125 million for the Senior Community Service Employment program (SCSEP), which helps low-income older adults with job skills and placements in part-time community services assignments. But funding constraints limit SCSEP to serving only a fraction of the older adults who could benefit.

The national service encore fellowships called for by the Serve America Act were inspired by a small pilot program in the Silicon Valley launched by Civic Ventures last year. That program, backed by Hewlett-Packard and the David and Lucile Packard Foundation, provides corporate managers and others seeking encore careers in education and the environment with year-long positions in high-performing nonprofits, along with modest compensation and career-transition support. Corporations, foundations, and government agencies are pursuing plans to expand the model state- and nationwide.

Employer attitudes toward older workers remain a significant barrier, but actual experience with encore employees appears to reduce employers’ concerns. Last year’s “Tapping Encore Talent” survey by the MetLife Foundation and Civic Ventures found that half of nonprofit employers see encore employees as “highly appealing,” citing their experience, commitment, and reliability. And those who have recently hired late-career workers are even more positive. Many nonprofit employers continue to have “serious concerns” – that encore workers could cost more in salaries and benefits, would be reluctant to learn new technology and lack technical and professional skills. But least concerned are the employers with the most experience with encore workers. The survey found that seven out of ten nonprofit employers rated the experience that encore workers bring to the job as a significant benefit.

An economic crisis as deep as the one we have gone through is too valuable to waste. The collapse of the old system of retirement is ushering in an era of longer working lives. A successful transition to an encore career produces a win-win: progress against social challenges and the bolstering of personal financial security. Let’s make sure that personal meaning and social impact are at the center of the new stage of work.

Generations is Copyright © 2010 American Society on Aging. Reprinted under license.

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