Using Retirement To Fund A New Business

Retirement can mean a lot of things to different people. Some look for lounging on a beach, reading a book, or golfing. However, for others the drive to keep working is the only thing that makes them happy. And for them, retirement can open a window for finally pursuing that dream job they've always wanted.

Usually entrepreneurship is correlated with young tech startups in silicon valley, not 60 year-olds coming out of a decades long career. But older workers have something those young entrepreneurs don't have: decades of experience and tons of contacts.

For those older Americans who are either pushed to retirement through layoffs or buyouts, or those who retire when they say its time- the benefits can include remaining active and continuing to produce income for themselves and their heirs. Only 15% of new entrepreneurs fell into the 55-64 year old age group in 1997, according to the Kauffman Foundation's Kauffman Index of Entrepreneurship. But that number jumps to 24% by 2016. Contrast that with the fact that start up activity fell for 20-24 year olds during the same period by 9%.

Studies show that among the many benefits to staying physically active both in mind and body are reduced risk of dementia, Alzheimers, and other health issues. Most importantly it shows those who remain active live much longer than those who don't.

The beauty of starting a business activity later in life is the fact that most retirees have the funding and experience to make a new venture a reality over those who are in their 20s.

Some retirees have a game plan perhaps decades in advance. But some arrive at the day of retirement without any clue what they will do with their newfound free time. For couples, too much free time together can ruin their golden years. And those with a strict budget can quickly let eating out, golfing dues, and other leisure expenses dwindle their savings. A business in retirement can not only allow you to pass time doing something where you're not spending money, but in fact making it.

What should I do??

There are many business activities retirees can start that can be fulfilling without adding stress or long work hours, while being your own boss (and therefore free to navigate the growth of the business as you see fit; from casual hobby to serious venture).

Here are some of the most common areas retirees venture. Keep in mind the number one is continuing their previous roles- just working for themselves on a contract basis. However, this means that you were already doing your dream job.


1) Consulting - This continues the previous point of continuing your previous career. However, now you are working for yourself, being your own boss, putting in the hours and effort you want. Using past connections to either continue to fulfill contracts or coach a new generation to perform the same tasks. Other freelance work can come in the form of computer work designing or programming, translating documents into another language for those of us that are bilingual, or other moderately technical skilled tasks like tutoring music or math that can be done right from home or over the internet in this digital age.

2) Writing - Some want to write the great American novel, while some just want to blog, write, or freelance in some fashion. As Mark Twain said, "write what you know". Most would write on the topic of what they know: their previous career, their hobby, traveling, or whatever interested them during their non retirement lives but couldn't monetize. You can write about anything. And in this digital age, anyone can be a writer, journalist, blogger... or start a subscription service on SeekingAlpha!

3) Bed n Breakfast - A popular idea commonly seen on HGTV, is to venture into the hospitality business running a bed and breakfast. As AirBNB becomes ubiquitous, more and more travelers are using bed and breakfasts looking for a more 'authentic' experience while saving money avoiding hotels. This can be great for retired couples to work together dividing the numerous daily activities and sharing in the experience. In the US, roughly 70% of bed and breakfast owners are retirees.

4) A Retail Business - This is one of the most common ideas retirees have. Most everyone has dreamed of starting some sort of store at some point in their lives, from selling clothes, trinkets, a restaurant, or some sort of service. It used to be starting a business was costly just to get it off the ground. But now almost anyone can get a business going online for next to nothing. Those selling items, say antiques, can peruse local flea markets for bargains and then sell those wares online in their own store, on eBay, or any one of numerous other gateways.

A neighbor of mine quilts while relaxing and her niece sells them on Etsy for her. Another buddy retired from crafting small items by order in manufacturing and starting his own concern with a 3D printer and his old contacts to do the small jobs his old firm felt weren't cost effective to do. There are even sites like that have requests for handy people (there are less and less of them) to build, fix, or assemble something.

Lastly, there are numerous jobs that can be done on an ad hoc basis that can pass the time and put a little coin in your pocket. Pet watching, catering (cooking), craft and other types of fairs, etc, all can be fun and rewarding. But a true entrepreneur can take anyone of these to the next level. These tasks can be organized into a business. Take cooking for example- several retirees can band together to cook for a shower or christening or whatever, all helping with the work while having fun together.

Invest for your dream job

The number one strategy to starting a new business in retirement is being in good financial shape at the start of retirement so you can focus on the steps after financing. If at retirement you are looking if you can afford X or Y, it's probably already too late. Be ready!

Those that utilize our service can secure their retirement while providing income to start that dream job they've always wanted. Once your golden years are secure by investing conservatively for both income and growth, additional income can be generated with much lower risk than those at the start of their careers.