Though starting a small business can be a rewarding experience at any stage of life, retirement is perhaps one of the most ideal periods to pursue a venture of your own. And since Americans 65 and older are more likely to be self-employed than adults of any other age group, according to the U.S. Bureau of Labor Statistics, if you do decide to kick off a business as a senior, you'll be in good company.
Of course, starting a business is not without risk, and to be successful at it, you'll need to go in with a solid plan. Still, it's a worthwhile move to pursue in retirement, and here's why.
1. It's a great way to generate income -- income you might need
Running out of money in retirement is a legitimate concern, especially given that so many seniors enter their golden years inadequately prepared. In fact, the average household approaching retirement (aged 56 to 61) has just $163,577 in savings, according to the Economic Policy Institute. Now to be fair, this data is a few years old, and it doesn't account for assets outside a retirement plan, like a home that can be sold. Still, it speaks to a general need for retirees to boost their income, and a small business can achieve that very goal.
2. It'll help you avoid spending money
One major benefit of being retired is finally having the time to do the things you want to do. But while having loads of time on your hands can be a positive thing, it can also come to drain your nest egg quickly.
Think about it: All of those theater visits, museum outings, and early-bird dinners can really add up if you aren't careful. The beauty of starting a small business in retirement, therefore, is that it gives you a way to occupy your time without actually spending money you should be leaving alone in your investments.
3. It could end up being good for your health
It's not always easy to go from a full-time work schedule to suddenly having no structure whatsoever. This especially holds true if you're the type who enjoys working and keeping busy. In fact, according to research from the Institute of Economic Affairs, retirement increases the likelihood of suffering from clinical depression by 40%, and much of that boils down to not having a purpose or fulfilling means of occupying one's time. Starting a business in retirement, therefore, can help ensure that you don't succumb to mental health issues like so many seniors do.
But it's not just your mental health you'll protect. Starting a business might help keep you more physically active, thereby preserving your overall health and saving you a little money on healthcare to boot. Another thing to consider is that your business might serve as an important social outlet at a time in your life that can otherwise be isolating. In a study by Rand Corp published last year, seniors who retired and then decided to go back to their jobs did so because they missed their former colleagues more than for any other reason. By running a business, you'll get to meet and interact with new people, thereby curbing feelings of loneliness that might otherwise start brewing.
Not everyone has the personality, work ethic, and drive to successfully start a business. But if you think you have what it takes, then know that retirement might be the perfect time to get the venture you've always dreamed of off the ground.