After a lifetime of working toward retirement, it’s finally here. You’ve traveled where you want to go and done everything you’ve put off, but now you find yourself itching to do more than sit around the house or join social clubs.
Retirement is a great time to start your own business. Regardless of whether you loved your past job, or it was just a paycheck, it’s time to move forward toward a new opportunity.
According to the Bureau of Labor and Statistics, self-employment is the highest amongst individuals ages 65 and older. Starting your own business is an opportunity of a lifetime that can offer financial and health benefits while you explore your passions.
Financial Benefit
While starting a business may seem like a hobby for some, businesses can provide income to help stretch retirement savings. Unfortunately, 49 percent of non-retired individuals are concerned they will not have enough saved for retirement. Running out of money during retirement can be a real concern, and any income can provide a cushion. A successful business can provide worry-free retirement while building a legacy for your family.
Not only does opening a business provide income, it also offers new options for funding your retirement. As a business owner, you can open an SEP IRA or an individual 401(k) account. The business you start will partially decide what kind of account you can open, so work with a financial adviser to understand which can offer the most benefits.
Also, most people forget that retirement often means more time to spend money. Day trips, vacations, and eating lunches out begin to add up as costly ways to keep yourself busy and active. Increased expenditures combined with decreased income is often a recipe for draining retirement savings.
Starting a business, especially one that you have a strong passion for, can give you some continued income for your retirement and help you avoid spending traps.
Health Benefits
Financial benefits are not the only positive aspect of starting a business in retirement. Many retirees feel that they lose their identity and have no purpose once they stop participating in the workforce. Opening a business can create that identity while exercising your brain.
In fact, stimulation and challenge during retirement can create a healthy sense of fulfillment, warding off depression while delaying or preventing dementia. A study at Oregon State showed the longer you wait to retire, the longer you will likely live because an active lifestyle that a business brings can slow down other symptoms that come with aging. By opening a new business, you can find yourself more active and engaged within the world around you.
Tips for Starting a Business in Retirement
While the thought of starting your own business is exciting, there are some things to keep in mind before jumping into a new business venture. The most important aspect is to determine whether your idea has room to be successful. The financial benefit is negated if the company foundation is unstable.
In addition to having a strong business plan, making sure you keep your retirement accounts separate from the business accounts is vital. Another aspect is making sure that you understand how to finance your start-up through planning. Basic business says you should not invest money you cannot afford to lose, so protect your retirement savings while starting your venture.
Also, start small with the venture. Begin by offering friends and neighbors your services before branching out. Brick-and-mortar ventures are rarely a good starting point because of operational expenses.
One of my clients always had a passion for dogs, so she started walking neighborhood dogs. From there, she moved up to overnight pet-sitting. Now, she operates a doggy day-care center and is building a legacy for her family.
That’s the most important tip for starting a business in retirement: start a business that you can become passionate about. A new venture in retirement can be hugely successful because of networks built over a lifetime career and experience earned with age. If you are not interested in the business idea, however, retirement can become as stressful as working a job you don’t enjoy.
Successful Retirement Ventures
Ultimately, opening a business in retirement is not about making a large enterprise with thousands of employees. Nor does the start-up require an aspect of technology, although familiarity and comfort with social media as a form of marketing is necessary these days.
Whether you decide to start a consulting business based on knowledge and contacts from your previous career or a hobby business creating small bits of value for friends and family, a successful retirement business is one that has a focused destination, but allows you to enjoy the journey.
A business can offer strong financial security far into retirement while offering health benefits that will prevent the signs and symptoms of aging. You should have fun while working your passion in retirement, and make the best of a great opportunity.
