There’s nothing quite like the joy of retirement. At long last, you’ll be able to say goodbye to bosses, long commutes, and the Sunday night blues in favor of–going back to the office? In fact, more and more older adults are finding fulfillment and extra income in starting their own business after retirement, but there are pitfalls to avoid as well. Knowing some of the typical mistakes ahead of time can keep you from making them.
Doubting Yourself
Not having the confidence to launch the business or follow through with ideas is common. You might worry that you should have done this when you were younger, that you will be eclipsed by younger entrepreneurs, or that you will not have as agile an understanding of your chosen industry as you might have a decade or two earlier. The truth is that older adults bring a great deal to the table that increases their likelihood of success.
In fact, older adults are often more likely than younger ones to succeed at various endeavors. They have more experience in moving a good idea through the stages of its execution. In addition, they have had decades to build up the necessary contacts for success. Finally, they are more likely to be financially stable, which can free them up to take more risks. A retirement business can basically represent extra income on top of your savings and Social Security, and that can significantly enhance the quality of your life after retirement.
Neglecting Financial Details
Failing to be diligent enough about tracking your finances is an error many small business owners of all ages make. This could manifest in not having a clear enough picture of your day-to-day expenses and revenue, or it could mean neglecting things like quarterly tax payments. If necessary, you may want to work with a bookkeeper or another financial professional to make sure you stay on top of financial matters. You should also learn about things like why business credit is important and tax prep for this new venture.
Risking Your Retirement Fund
You need some funding to get most types of business up and running but resist the temptation to raid your retirement account for that money. Your savings are too important to risk. Instead, look at other ways to get the money you need. Depending on your business idea, you might be able to attract investors. You can also be creative in how you approach this, which could lead you to find untapped sources. Your life insurance policy could be worth something. In fact, this could be the case even if it is a term life insurance policy with no cash value.
You may have the option to sell term life insurance policy to a third party, who is then responsible for paying the premiums. You won’t get the full amount of the death benefit, but you will get more than the policy’s value. One reason this can be a viable option for many seniors is that you may no longer need the policy. Often, its purpose is to protect dependents, and if your children are adults, you might not need it any longer. Unfortunately, many people do not realize that they could get money for their policies and simply let them lapse rather than trying to sell them.
Not Following Your Passion
This isn’t the time to force yourself to do something you hate. On the other hand, it’s a great time to pursue something that you always wanted to do and never had the time for or could never take the risk to do. However, following your passion doesn’t always mean that the business specifically grows from your set of interests although it might. It can also simply mean that you are caught up in the activity itself.
In particular, if you have a business-oriented mind, you might be stimulated just by the problem-solving aspects and the challenge of entrepreneurship. If you aren’t feeling inspired by the business, it might be a sign that you should move on to something different. By the time you hit retirement, there is really not much reward in embarking on another activity in which you are simply going through the motions. Find something that really ignites a spark in you, and pursue that.
Failing to Focus
Are you too busy to start a business? Can you give it your intense focus for six months or a year? What exactly is your purpose in running a company? Are you looking for something to occupy your time, hoping to make a little extra cash on the side, or are you really serious about making a success out of this?
It’s worth asking yourself these questions to gauge how focused you need to be and whether you’ll be able to bring that focus to your work. If your idea is for something fairly labor-intensive and you already have a lot of obligations, maybe it’s not the right time. It’s great to have a lot of engaging activities during retirement, but you don’t want to spread yourself so thinly that you aren’t doing anything well.