Some see retirement as an end goal in itself. You’ve worked hard your entire life, and now it’s time to relax and enjoy hobbies. Others see retirement as the perfect time to return to that lifelong collection of “one-day” dreams and make them happen.
If you have been considering turning your passion or hobby into a business after retirement, there are a few important questions to ask and actions to take before you set out on this new adventure.
Is it Realistic to Start a Business in Retirement?
There are many successful and recognizable entrepreneurs who didn’t follow their true passions until they hit retirement age. Notable examples include Colonel Sanders (the founder of Kentucky Fried Chicken) and Laura Ingalls Wilder (the author of the best-selling Little House on the Prairie books). There are hundreds of other examples of successful entrepreneurs who only started their business after they were already retired from a career.
In fact, starting a business later in life may be good for your health. According to Harvard University, studies have shown that “people who worked past age 65 were about three times more likely to report being in good health.” There are also several factors that make working after retirement simpler than it was in the past, including that modern jobs require less physical work, and a larger proportion of the population has post-secondary education.
3 Steps to Take as You Start Your Business in Retirement
Find Out How Much You Can Spend
When you turn a passion into a business at retirement age, it’s not a great time to “risk it all.” You still want to be comfortable in retirement, so it’s not wise to dip into the retirement income plan you’ll need in place to keep up with your lifestyle. Work with your financial advisor to determine where you can use extra funds to begin building the business. And remember, plenty of businesses get their start on a dime! Save unnecessary expenses and overhead until a point where you’re already bringing in some income.
Test it Out Close to Home
One advantage of starting a passion-based business later in life is that you have the resource of time on your side. An immediate income isn’t usually necessary, which means there is time to perfect your product or service before you put it out into the market. If it sells well close to home, you’ll be far more likely to translate that success into a larger market, and with less risk and upfront expenses.
Once you’ve completed your testing, branch out into larger markets slowly. See what works best for marketing and advertising, test out different price points and styles, and get feedback and reviews from early customers to refine your product over time.
Lean on Your Team of Professionals
If you spend too much time on the details of getting your business off the ground (like legalities, licensing, etc.), you’re more likely to lose some of the passion and drive that made you start in the first place. Allow some of these necessary items to be handled by an outsourced team of professionals. This could include your lawyer, accountant, and financial advisor. These professionals can help you protect your investment, stay on track for success, and keep your new running smoothly so you can enjoy the process and results.
Financial Guidance for Your Business Ventures
Whether you are retired or a pre-retiree, if you are considering turning your passion into a business after retirement, reach out to a professional financial advisor to learn how it will impact your retirement plan. To meet with Regan Schiller & Associates, you can book a one-on-one consultation online.
This is a general source of information only. It is not intended to provide personalized tax, legal or investment advice, and is not intended as a solicitation to purchase securities. Regan Schiller is solely responsible for its content. For more information on this topic or any other financial matter, please contact an IG Wealth Management Consultant.
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