Starting a Business in Retirement
Which age group has the highest rate of self-employment in the country? According to the US Bureau of Statistics, the self-employment rate among workers 65 and older (who don’t incorporate) is the highest of any age group in America: 15.5%.
The traditional concept of retirement is radically changing. The retirement your parents and grandparents knew is very different than the one you are likely to experience. Why? One of the biggest factors is life expectancy. Retirement used to be a stage of life that lasted 10 or 15 years. Now it might last 20 to 30 years—a significant increase.
What people are doing with their time during this next phase of life is changing as well. Yes, golfing and traveling may still be on the agenda, but it’s not everything. Retirees also feel the need to stay mentally sharp and engaged, and this is why many are starting businesses during this stage.
How about starting an online business? I mean, why not? The rewards can affect different parts of your life, from the financial to the mental. Starting an online business can help you earn some extra income to pad out your retirement savings. It can also help to ease you from your career into this next stage. And yes, it can also keep you mentally sharp and engaged.
Let’s pause for a moment to think about this: You live in a time where it’s never been easier to start a business like this. The barrier to entry is very low. However, the options are many and analysis paralysis can set in rather quickly. So first it is important to get yourself into the right “business mindset,” and then set yourself up for success by understanding what makes sense for your vision. (https://retirementredefinition.com)
How? I’m glad you asked.
Why Start a Business in Retirement?
Recently I asked Kevin Lyles, who works with people as they make their transition to retirement, what’s the most important thing to consider when starting a business. His response was simple, yet powerful: “What do you want to get out of the business?
Kevin shared the five most common reasons why people start a business in retirement:
First the obvious: If you need the income to survive on a daily basis, it might be worth considering staying with your current company or looking for other opportunities. It’s challenging to start a business and have it produce this level of income straight away. However, if there are still some years before you retire, it’s worth starting to build momentum to help with the transition when you actually retire.
2. Spending Money
Assuming your retirement financial plan is solid and you don’t need the income to survive, starting a business would be a great way to produce extra spending money to enjoy your life without touching your retirement savings.
3. Building a legacy
Legacy has different meanings depending on who you’re talking to: For some, it might be leaving a financial legacy. For others, it could be passing on hard-earned wisdom to the next generations. Perhaps your business could be that legacy.
4. Solving problems
This is the answer that people usually go to first. If they’ve succeeded in their career, they attempt to turn that into their retirement business. Are people willing to pay you for something you’re really good at?
5. Purpose and meaning
One of the big challenges in retirement is bridging the void of time, purpose and identity. “If they’ve been working 10-12 hour days for 30-40 years, many retirees now wake up and don’t know what to do with themselves,” said Kevin. “Having a business can really fill that void and give them some purpose and reason to get up in the morning.”
Do any of these resonate with you?
Look back at your career and the past 30-40 years of your life. Reflect on how many hours of your day and your life work occupied: Not only the workday itself, but the time spent commuting and the time spent thinking about it even when the workday was over. It was a lot of time but it was necessary for survival. As you transition to this next stage, work can take on a new meaning. Now you have full control over how you spend your time.
Think about the vision you have for your retirement and how a business could support it. When you know what you want to get from your business, it makes it easier for you to decide on opportunities that fit your future.
Are you thinking of starting a business? What do you want to get from it? Let us know in the comments below.