When you picture your retirement, what do you imagine? For some, it may be relaxing on holiday or spending more time with loved ones. But more retirees are choosing this time to launch a business.
Whilst retirement may have once been exclusively been associated with putting your feet up and unwinding. Today, it’s a milestone that’s far more flexible. It’s not surprising that more retirees are tuning into their entrepreneurial spirit to release dreams that may have been long-held.
According to the Office for National Statistics, the number of self-employed people over the age of 65 has more than doubled in the past 15 years. Almost half a million people that would have traditionally retired are continuing to earn an income this way.
There are plenty of reasons why these retirees are still working in some form, from boosting pension income through to enjoying what they do. If it’s something that appeals to you, there’s more than one reason to launch a business in retirement.
1. You’re more financially stable now
You may have hoped to start a business for many years, and for some retirement can be the perfect opportunity to explore those ideas that you’ve had.
Hopefully, you head into retirement financially secure and confident in your income. You’re also likely to have fewer financial commitments, such as paying a mortgage or raising a family. Without these financial concerns, launching a business in retirement can make financial sense. It may mean you’re free to invest in your venture without having to worry about the knock-on effects in years to come.
2. Transition into retirement
More retirees today are choosing to transition into retirement rather than the traditional ‘cliff-edge’ approach. There are many ways to do this, such as working part-time or flexibly. But if starting a business appeals to you, it can be the perfect way to strike the right balance between working and enjoying more free time.
As your own boss, you’ll be in a position to dictate your own hours and the type of work you do. It can be a great way to build an early retirement lifestyle that suits you.
3. Create a sense of purpose
Whilst the financial side of retirement is often an aspect we focus on, including saving into a pension, the emotional side is just as important. For some approaching the milestone, it can be difficult. Our work is often used to define us and provide a sense of purpose. Without a traditional job, you can lose this.
Starting a business isn’t for everyone. But those that have the entrepreneurial spirit can find that it provides goals and aspirations that deliver a sense of purpose in life.
4. Boost your income
If your current retirement provisions don’t provide you with the lifestyle you want, a business can help increase your income. It can also provide flexibility if your current retirement provisions aren’t flexible, such as the income secured through an Annuity or Defined Benefit pension.
Of course, if you hope to launch a business, there are outgoings to consider too. How will your tax liability change? Will you need to invest in your business? Understanding the income your business will deliver and how this may affect your finances can provide confidence. This is an area financial planning can help with.
5. Turn hobbies into a business
Technology has opened up a whole new customer base for people launching a business. It gives you an opportunity to make money from your hobbies. If you already indulge a passion that you could sell, why not see if there is an audience out there? This is a great option for those that craft things that can be sold either directly or online.
Keep in mind, though, that whilst you may love a hobby turning it into a business will come with other work, from admin to sales. If this isn’t an aspect you’re interested in, it may be worthwhile enlisting some help.
6. Improve your wellbeing
Research has shown that keeping your mind and body active can improve your overall wellbeing in retirement. There are, of course, plenty of ways you can do this but it’s one benefit of launching a business in retirement, it’ll help give your brain a workout, whether you’re getting creative or focusing on the numbers.
Whilst income may not be the sole reasons for pursuing business ambitions in retirement, financial planning is important. It could affect the amount of tax you pay when accessing your pension, for example. Or you may need to understand whether you can sustainably afford to invest in a business. These are concerns that financial planning can help you get to grips with. Please contact us if stepping into entrepreneurship in retirement. We can help provide you with the information and confidence you need.