Retirement is viewed as the end of one’s working life and the beginning of leisure time; a time to reflect on what has been accomplished thus far and enjoy one’s earnings from a fruitful career. Many new retirees though use this opportunity to create startups, as both passion projects and income generators. Here are three reasons why it may not be a bad idea to start a business after retirement yourself.
Free Time – Retirement brings a sense of relief and completion to a person’s life, however with all the new free time available it can be daunting for some people. It is not uncommon for many new retirees to face bouts of depression as they must learn to adjust to new rhythms of living without the daily pressures that kept them mentally sharp. Starting a new business during this period can help knock out two birds with one stone – filling up all of that newfound free time in your schedule while providing a new activity to keep the mind focused.
Furthermore, having a small business can fill that time while generating income, instead of potentially spending too much of your savings on other indulgences. As hard as it is to believe, there is such a thing as having too much time off, especially as life expectancies increase and people need to cope with that time one way or another.
Minimal Risk – Another reason to consider creating a business after retirement is minimal risk. You have already worked a lifetime and accumulated enough assets in theory to enjoy the rest of your life. The need to work to cover your expenses has already been handled. However, there are tips to remember when starting a new venture at this point in your life.
First, do your research and find a business idea that makes sense for you financially. There’s no point in putting your entire nest egg at risk for something that is not fun and loses money. Find an idea that you believe will be fun to do and has real income potential. The best approach is finding a business model with low overhead and startup costs attached.
Second, determine how much capital you are willing to invest versus the income potential. If it’s something that won’t earn enough to cover costs or risks your retirement savings, then it isn’t worth it. Remember, this should be fun for you, not a burden.
Make Money – Perhaps the best reason to start a business after entering retirement is simple – you’ll have extra money available to play around with and enjoy your life even more. Having additional cash available to pay for that overseas trip you’re interested in taking, or picking up that hobby you’ve never been able to indulge in before.
A personal business can also help provide peace of mind if you’re looking to supplement your income while waiting for other benefits, such as Social Security or perhaps minimum distributions. Either way, this extra income can relieve any further pressures you may feel as you enter this new phase of life.
If you do decide to start a new business after retirement, then making sure it is properly structured and protected is an important first step to take. It can make all the difference between keeping everything you’ve worked your entire career for and having it taken away by creditors in case your business goes into debt, and those bills are left to be paid. Thankfully, Anderson Business Advisors helps set up new corporate entities every working day and is available to you if this is a step you feel ready to take.