Be the Trustee of your Retirement!
Starting a business after retirement is a growing trend. According to the National Bureau of Economic Research, about 25% of workers between 50-59 are self-employed. Of those ages 65-69, 46% are self-employed. And 68% of those between 75-79 are too. All of these groups have higher rates of self-employment than those under 50, where just 20% are self-employed.
Those who started a business from scratch represent only one group breaking into the business world after retirement. Franchises offer proven business concepts to help some entrepreneurs make money more quickly. Those who have retirement savings can often buy into one of these programs quickly. In fact, there’s been about a 40% increase in people over 55 buying into franchises since 2007.
Why are people starting a Franchise business:
- Increased financial security – Most adults who decide to retire have significant savings. However, medical costs and other expenses can also increase. Continuing to work allows you to save more of those funds and continue earning interest for a longer period of time. You may even be able to open another retirement account at your new job or continue adding to your previous accounts for many more years to come.
- Access to health benefits – If you are working a traditional job with benefits, you may get access to better health insurance than you would otherwise. This can help you get quality care and save money. Additionally, you normally can’t get access to Medicare until age 65. As a result, you may be stuck paying out of pocket without an employer plan which is quite expensive.
- Ability to stay active – Working keeps both your mind and body active. Overall, this can improve both physical and mental health. You’re less likely to sit idle all day long and let muscles atrophy or gain excess weight. Thinking through complex problems can stave off serious issues like dementia. Additionally, some people simply enjoy working and spending time with co-workers. This can be especially beneficial for those who don’t have a ton of other activities or hobbies to look forward to.
- Opportunity to try new things – Those who stayed in a single position or industry for their whole career may have other interests they want to pursue. A retirement job lets you explore different possibilities or focus on things you enjoy. This may be an especially potent benefit for those who start businesses. This gives you more control over your role and choice of industry. For example, if you previously worked in finance but wanted to do something creative, you might write and self-publish your own series of books.
- Child Care
- Writing and Editing
- Handmade Business
- Dog Walking
- Property Management
- Public Speaking
What Happens If You Work After Retirement?
If you work after retirement, you may be able to save more money in your 401(k) or other accounts so it continues to earn interest. However, your Social Security benefits may decrease if you earn more than the $45,350 limit up to your full retirement age.
You can start collecting Social Security benefits at age 62, but your benefits increase if you put them off until your full retirement age. This age depends on when you were born. The Social Security Administration offers a chart to help you determine your full retirement age and calculate benefits before that.
Basically, it’s up to each individual to weigh the pros and cons of retirement businesses or jobs based on their own situation. If you could benefit from preserving or adding to your retirement accounts for several more years, it’s likely worthwhile. If you care more about maximizing your benefits, a traditional job may not be worthwhile.
***To learn more about opportunities in retirement, please contact me at Joshco Partners for a free consultation.