Should You Start a Business in Retirement?


The Baby Boomers are the first generation to view retirement as simply another chapter in an active, results-oriented life. And many of them are expressing that by becoming business owners after they retire from their main career. This is done either out of need or desire—or sometimes a combination of both. A majority of seniors who start businesses begin at home, employing family and friends, which limits startup costs and gives them more flexibility and control over their time commitments. Those who start businesses later in life are often more focused on leaving a legacy and pursuing dreams, rather than simply proving how successful they can become.

Rethinking the Concept of Retirement

Baby Boomers are reinventing retirement. They are leveraging their decades of experience, vast professional networks, and accumulated financial resources to start up their own businesses as so-called encore entrepreneurs. Between 1996 and 2012, Americans ages 55 to 64 had a higher rate of entrepreneurial activity than those ages 20 to 34, according to a study by the Kauffman Foundation.

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Why Become an Encore Entrepreneur?

There are two main reasons why retirees take the business startup plunge. Some need extra income to keep up with inflation, supplement savings, and maintain their pre-retirement lifestyle for what could be a very long retirement. Others want to fulfill a dream of being their own boss with the flexibility and control that offers.

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Retiree Business Startup Considerations

Building a business is not something you do on a whim—particularly when you’re older and you don’t have as many years to rebound from a failed venture. You’ll want to establish clear goals and expectations, focus on something you’re good at, and perform honest calculations regarding launch costs and income potential. Writing a simple business plan can help put all of this into perspective.

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Financing Your Encore Startup

Business startup financing options are pretty much the same whether you’re age 30 or 55, with one exception: as a retiree, you may be tempted to tap your retirement accounts. However you choose to fund your venture, starting a business doesn’t have to cost a lot. Many modest home-based opportunities can be launched for $1,000 to $2,000—well within your ability to simply use a credit card for seed money.

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