The average age that people are retiring these days is 60. For the past twenty years, that number has slowly been rising. The main reason is that we’re living longer so we’re choosing to work longer. The other reason is aging workers can’t rely on a pension or social security to sustain them in their old age, so they need to work longer to earn and save more. Finally, some retirees just want to work to give back to their communities during their retirement.
On the flip side of that retirement coin is the fact that people are discovering they haven’t saved enough to retire when they’d like. In fact, 60% of workers have less than $25,000 in retirement funds, and 43% of Millennials lack any kind of retirement savings. These are all reasons why many retirees are choosing to get creative in their retirement years versus moving to Florida.
Why Choose Entrepreneurship?
A major trend among retirees is becoming an entrepreneur and/or a small business owner. The Kauffman Foundation found that almost a quarter of entrepreneurs are age 55 or older. And Merrill Lynch states that 70% of pre-retirees are planning to work in retirement.
Continuing work after retirement doesn’t just come with financial advantages, but health-related benefits as well. 83% of surveyed retirees feel that working after retirement helps them to stay more youthful. If you choose to not work in retirement, keep in mind that 66% that do experience a decline in their physical and mental abilities.
Why else should you consider being an entrepreneur in retirement? According to Duke University, there are twice as many successful entrepreneurs over age 50 than there are under age 25. Older entrepreneurs have more financial strength, self-awareness and personal stability than those that are just starting out. Plus, older workers can often face age discrimination in the workplace, so it often pays to work for yourself!
Things to Consider
If you’ve been bitten by the entrepreneur bug and want to start your own business in retirement, here a few things to consider before taking that leap:
- Risk– Being a business owner comes with perks, but it also comes with significant personal liability and threats to your personal estate. Be sure to protect yourself beyond your basic homeowners’ insurance. Talk with your attorney and insurance agent about the best way to protect yourself and your business. You might need to form an LLC, LLP or corporation and start a business insurance policy to safeguard your assets.
- Investment– How much should you spend to start a business? While that number differs for everyone, you won’t want to threaten the financial security you’ve worked so hard for. Consult with your financial advisor to see if your business plan is what’s best for you and if borrowing or tapping into your savings makes the most sense.
- Enjoyment– After all is said and done, you want to enjoy your senior years regardless of if you relax by the pool or start your dream business. You don’t want to dread going to work each day if it’s your own business – be sure it’s meaningful yet fun.
If you decide to take the entrepreneurship leap and have decided it makes sense to borrow some money to do it, WWFCU has a business loan to help. Speak to a member service specialist at (734) 721-5700 or stop our branch to learn more.