Retirement opens up many opportunities for people, including the chance to start a new business. A retirement business can provide meaningful activity and the chance to maintain a lifestyle you’re suited to, while at the same time giving you some extra income to enjoy in your second half of life. But where should you begin?
First, choose a business that makes sense for you, both for your lifestyle and your finances. You don’t want to spend your retirement going right back to work, and you also do not want to spend all of your retirement savings on a business venture that is not a good fit. In order to figure out what business is right for you, there are a few factors you should consider.
What are your goals for your retirement? How well will a business fit into those goals? You should consider whether or not the business is a means to an end for your goals, such as providing more money for your retirement while requiring less time than a full-time job. You want to make sure your retirement business provides a sense of purpose, and the best way to do that is to align it with your retirement goals.
Life and Work Style
Do not trap yourself in a workstyle that will make you miserable during your retirement. If you’d rather be social and meet new people, do not choose a business that will have you cooped up in a home office all day. In addition, consider how the business will impact your retirement lifestyle. If the business requires you to work six days and 50 hours a week and you’d like to have the opportunity to travel and enjoy leisure time in your retirement, then that business may not be for you.
Arguably, the most important factor is your retirement cash flow. A retirement business can be great if it provides you with extra income to enjoy your retirement, but if it ends up bankrupting you, it could put your future financial security at risk. Take the opportunity to sit down with financial professionals and a business planning lawyer to find out exactly what you need to make the business profitable and determine if that is what you want to do during your retirement.
All business owners should have a succession plan, but it is even more critical for those starting a venture later in life. You’ll want to determine how the business should continue to operate and who can make decisions in the event you are incapacitated for any length of time. You will also want to use your estate plan to dictate who should inherit your business when you die if it’s the type that can be passed down to adult children, partners, or loved ones.
If you’d like more information about starting a retirement business, or if you’d like to review and assess your current retirement business plan or business succession plan, please contact our office at 1-877-653-3450 to schedule a complimentary initial consultation.