AUTHOR: RACHEL MICHAELS
Rachel Michaels is a software developer with an endless fascination for how technology continues to change everything — from big business and finance to everyday life and personal connections. She enjoys writing on the topic of trends in the financial industry. When she’s not working, Rachel enjoys playing video games and spending time with her dog, Daisy.
Entrepreneurship is not just for the fresh-faced Zuckerbergs of the world, with different industries experiencing an exponential rise in seniors starting and successfully maintaining their own businesses post-retirement. This demographic enjoys the benefit of their experience, healthier habits, and more knowledge compared to past generations. In fact, a 2014 study by Merrill Lynch entitled ‘Work in Retirement: Myths and Motivations’ reports that 7 out of 10 pre-retirees want to keep working, with these pre-retirees 3 times more likely to be entrepreneurs than younger people. These senior entrepreneurs — "seniorpreneurs" for short — are redefining the small business landscape in the country, with half of all US small business owners being 50-years-old or more in 2016.
To understand this phenomenon, it’s useful to calculate all the extra years that seniors these days enjoy and just how many seniors there are. In Maryville University’s industry outlook for business professionals, it was found that a whopping 3.6 million executives retired in 2017, with more older businessmen and women joining the ranks of retirees in recent years. While this has resulted in an influx of younger leaders occupying business positions in companies across the globe, it also means that more and more seniors have free time to pursue their own entrepreneurial interests as well. This free time amounts to around 20 to 30 years based on today’s levels of longevity, so we can’t really blame them for looking for productive ways to pass the time.
Economic factors also have a unique role to play in Baby Boomers’ inclination towards entrepreneurship. Boomers are most likely to say that they’ve experienced some form of financial loss since the Great Recession and that their household expenses have continued to rise. CNBC reports that 78% of Americans are concerned about not having enough money for retirement, so it comes as no surprise that many seniors are forced to postpone retirement or find an alternative source of income in the form of entrepreneurship. Some retirees are also unaware of their options when it comes to retirement, and have concerns about their pension, which was raised in our previous Q&A on Financial Planning and Investing.
Seniors who do decide to take the plunge into small business ownership often find that they have significant advantages over their younger peers. Older entrepreneurs have a unique value proposition — that is, the years of experience that come with their age. They often know what works and what does not, and can easily approach problems with solutions based on tested knowledge. When things go wrong, seniors are also resilient and persistent. With a lifetime of failures under their belt and boldness that comes from understanding, they have the risk-taking capacity necessary for successful entrepreneurship.
These professionals are also creating jobs for thousands of Americans, boosting both the local and national economy. By staying engaged in their businesses, they contribute more to social security and Medicare through their taxes, helping other citizens who benefit from these programs.
As senior professionals find success and vitality in their older years, we are right on time to catch the rise of these impressive seniorpreneurs. They have proven that they are assets in the world of business, and their experience continues to enrich and enliven the industry. And although only time will tell the long-term impacts of the rise of seniorpreneurs today, for now our seniors can rely on proper financial planning and good-old grit to continue shining in their golden years.
Roy Larsen, CFP®, AAMS® is a Fee Only Certified Financial Planner practitioner and acknowledged fiduciary. He works with clients in the Gainesville, GA. area outside of Atlanta and throughout the United States. Larsen Wealth Management specialized in the distribution phase of retirement or your version of chapter two. Roy has been quoted in the Wall Street Journal as well as the New York Times and has won the 5-Star Professional award for 6 consecutive years as one of the top Wealth Managers in Atlanta. Roy can be reached at 678-696-8755 or roylarsen @investinretirement.net.
The opinions voiced in this material are for general information purposed only and are not intended to provide specific advice or recommendations for any individuals(s). To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
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Roy Larsen is a Certified Financial Planner™ practitioner and Fee Only Wealth Manager who resides outside of Atlanta, Georgia.
Roy's Financial Blog contains articles on the multiple and complex issues of living successfully in Retirement. There are additional resources on our educational website, www.successfulretirementinstitute.com.