Baby Boomers – Should you Start a Business After Retirement?
Many Baby Boomers are considering leaving a full-time job and starting another job. A 2004 study by American Association of Retired Persons (AARP) revealed that 79 percent of people who responded to the survey were planning to work after retirement and 17 percent were planning to start new businesses. So, many Baby Boomers are planning to work beyond the point of retirement.
You have heard about “Colonel Sanders” who started a business in his 70s. That’s actually not true, but he was middle-aged before he started KFC. And you may know other people who have retired and started new businesses. But there is no way you’re going to jeopardize your precious retirement income to start a business.
What do you need to start a business after retirement? I’ll tell you what my husband and I have decided:
- Retirement Savings? Using your retirement savings is not an option. If you have money that was given to you from another source, that might be good money to use. Otherwise, start slowly and with as little money as possible.
- Monthly Expenses? Do you have a way to pay your bills without relying on your business? If you don’t, will you have to take out money from savings to pay monthly bills? In this case, you probably should not start that business.
- Health and Energy? How is your health? Do you keep fit? Even a part-time business takes a lot of time and energy. If your health is not good, you might not have the energy to keep up a business, even a part-time one.
- Insurance? Do you have health insurance? If not, can your business pay for your health insurance? You may not be able to take money from your business to get health insurance, so you should have another source to pay for this important coverage.
- Support? Does your spouse support your new business idea? How about your family? Do you have people you can rely on if you need help? An supportive spouse and family can mean the difference between success and failure in a new business.
While you can use your new business to keep busy and to increase your income, don’t get into this business unless you have enough personal and financial support and personal resources (financial and internal) to get through the rough times that will invariably come along.
7 Comments
On this topic, I came across a company that helps people start their business while they’re still at their current job. Could be very helpful for people who are going to retire soon and are looking for a way to get started while they still have an income instead of starting later when they have no more stable income. http://www.spirusgroup.com
Thanks for the tip, Matia.
With the current economy and retirement income likely to be down from the 40% drop in the stock market since May, starting a small business might not be a choice, it might be a necessity. Why?
–hiring is frozen
–layoffs are on the rise, with unemployment at 6.5% and heading to 8 or 9%. That’s a lot of unemployed looking for new jobs that are not becoming available.
–retirement income is down,unless you got out of the market completely (including international) and have guaranteed interest rates (t-bills, etc; muni bonds are no longer immune, apparently).
So a lot of folks will have to find supplemental income, cut expenses, liquidate some assets (I hate to say that, but I know mom is considering selling the house), and make their own breaks.
So build your OWN economy. We adopted that as our tagline before the downturn, and truly believe that most people can start a businness and do decently if you network, market yourself, and offer remarkable service. And buy local when you spend! Up to 4 times more of your dollar stays local when you buy local, as opposed to national retailers. Small businesses need your help too.
One last thought–healthcare isn’t going to see much of a contraction, which means doctors, nurses, hospitals, and the supply chain around them are good potential targets for you.
Thanks for listening.
Great blog!!
[...] response to my post last week about “Should you start a business after retirement?“ Charlie from Circledog commented, “You may have no choice.” He’s [...]
[...] response to my post last week about “Should you start a business after retirement?“ Charlie from Circledog commented, “You may have no choice.” He’s [...]
As boomer who started her own marketing agency, it is by far the best decision I could have made.
We work with many boomers who are making the choice to start their own business. We provide marketing and website services to them that help them launch and grow their business. If you’re starting your own business it is critical to understand who you are as a company and what makes you different – set yourself apart from the crowd and start making money now.
Let me know how we can help.
Chris Beebe
http://www.theVisionaryAgency.com
You have asked one of the most important questions that will face baby boomers in coming years. The decision to start a business will dramatically shape their lives, hopefully for the good. You provide an excellent resource to help baby boomer entrepreneurs think through this very significant decision.
Shallie Bey
Smarter Small Business Blog