You’re retired. Now what? Whether it was a personal or persuaded decision you’re still not ready to call it quits, even if you have the money to do so. Well, you’re not alone. Since 1996 the number of new entrepreneurs age 55 to 64 has increased from 14.5 percent to 22.9 percent in 2010, according to the Kauffman Index of Entrepreneurial Activity. The increase speaks to a growing trend—Baby Boomers leaving corporate America to start a business doing something they love to do. Erin Botsford, founder and CEO of a financial planning firm, The Botsford Group, and author of The Big Retirement Risk: Running Out of Money Before You Run Out of Time, is an expert on the topic. She explains, whether you have the money to retire or not, “I think most start-ups are people giving themselves the opportunity to do what they love,” she says, “that’s what I chose to do.”
Here are five reasons you should be too:
1. Pursue a true passion.
Whether you loved your past job or it was just a paycheck, this new start-up is a fresh opportunity to do something you really care about. So make that hobby or back-seated passion more than just something you do in your spare time. “Depending on your financial situation you don’t have to do something to raise money,” Botsford says. “It can be something you’re passionate about.” Financial freedom widens your start-up options even more. “There’s this guy who did a baseball card trading shop,” she says. “That’s what he did on the weekend.” Write down what you love, what you can afford, and what you need to live.
2. Enjoy flexibility.
We won’t lie to you, launching a start-up will take time—lots of it. But you’ll be in charge. And as you grow your business and delegate tasks it’ll be even easier to decide if you want three-day weekends, or prefer to work from the comfort of your home. “You can choose to work three days a week or seven days a week,” Botsford says. “Flexibility is a big one.” Set your own work schedule and get things done wherever, whenever.
3. Invest in yourself.
Buffer your retirement fund. Take those classes you were always curious about. Improve your personal brand and the success of your start-up will follow. Don’t wait around for someone else to decide you’re worth investing in—just do it yourself. “Identify your weakness, and here’s the big thing: Do not try and compensate for it,” Botsford says. “Don’t work on your weaknesses. Instead surround yourself with people where your weaknesses are their strengths.” Using the strengths of others will allow you to utilize your true talents and maximize your levels of productivity and efficiency.
4. Be in control.
“From a control standpoint it’s hard for people to be one Friday afternoon from a pink slip,” Botsford says. And seniority doesn’t hold the value that it used to. So take hold of your future and protect yourself from an uncertain economy, layoffs, and downsizings by creating a business where you’re in control. Yes, a start-up will have some uncertainties, and not everything is predictable, but at least your hands are holding the reins. “I have three companies and they all have their own set of risks,” Botsford says, “but I feel like a bigger risk is having someone else in charge of my own destiny.”
An earlier retirement than expected may mean you don’t have enough money saved up, or perhaps you just want to live a bit more comfortably throughout the years. By launching a start-up you’re creating something with definite potential for growth that you have a good amount of control over. This is good because according to the Employee Benefit Research Institute, in 2010, “An estimated 47 percent of Americans born between 1948 and 1954 may not be able to afford basic expenses and uninsured health care costs through retirement.” The success of your start-up can put you with the 53 percent who are financially secure.
But before you do…
Launching a start-up is a big responsibility, no matter what age you are. So before you take major steps toward starting your own business in retirement, take a few baby ones first. “Obviously the first thing is the financing: can they afford it?” Botsford says. “The second one is their unique ability: are they qualified to do it?” Look at your accounts, your skill set, your resources, and what you’re realistically capable of before you make the leap, and then enjoy the ride.