Schäfer retired from competitive skating in 1936. He moved for a couple of years to the United States, where he worked as a coach. In 1938, he opened a sport store in Vienna. In 1940, he and Herta Wächter (also a figure skating coach) founded the "Karl-Schäfer-Eisrevue" (Karl Schäfer Ice Revue). In 1943, Schäfer became an actor and was the star of the movie "Der weiße Traum" (The White Dream), which was produced on Engelmann's ice rink in Vienna-Hernals.
After World War II, Schäfer participated in rebuilding the Engelmann's ice rink, and from 1946 on he coached young skaters there. He moved again to the U.S. in 1956 and worked there as a figure skating coach until 1962. In 1962, he returned as a coach to Vienna-Hernals and lived and worked there until he died.
The Karl Schäfer Memorial was a figure skating competition named after him that was held in Vienna from 1974 to 2008.