Retirement can mean many things, but it’s not often thought of as an entrepreneurial “second act.” But, in fact, as New York Times reporter Elizabeth Olson wrote in a perceptive piece from the newspaper’s special retirement section–headlined TURNING HOBBIES INTO PROFITS, WITH A LITTLE HELP—“increasing numbers of people of retirement age or nearing it are remaking a hobby, interest or passion into a money-producing enterprise.” Excerpts from that article:
“Many [older entrepreneurs] don’t have all the business tools they need. So they are tapping into a new joint effort by AARP and the Small Business Administration to help people 50 and older learn about business plans, advertising and marketing, and social media.
“The two groups held an ‘encore entrepreneur’ mentoring day last October and followed up with four weeks of outreach last month, offering 100 events around the country to link fledgling business owners with mentors and other resources.
“Research showing an uptick in such entrepreneurs prompted AARP to get involved so its members ‘can pursue entrepreneurship as a means to generate income, boost financial security and assist others in meeting needs’, said Jean C. Setzfand, AARP’s vice president for financial security.
“A recent AARP survey, she said, found that nearly one-quarter of those self-employed, which comprise a large share of small businesses, are 60 years old and older. Another AARP survey found that 10 percent of wage earners planned to start a business after they retired.
“The Ewing Marion Kauffman Foundation has found retirement-age people starting businesses at the fastest clip of any age group. Its Index of Entrepreneurial Activity, released in April, found that the share of businesses started by entrepreneurs from the ages of 55 to 64 was 23 percent last year, up from 14 percent in 1996 and higher than the 20- to 34-year-old age group.
“The question of whether to invest savings typically comes up during mentoring sessions that are either live or online, said Ms. Setzfand, and ‘we always tell people that it is not a good idea to dip into retirement funds to fund any venture. We recommend setting aside a separate fund’.
“Another stumbling block for retiree-entrepreneurs is the work-at-home swindle, she noted.
To avoid such pitfalls, retired people, who are often starting their own venture after stepping away from a structured workplace, can pair up with experienced business people at the events for older entrepreneurs, said Michael Chodos, associate administrator for entrepreneurial development at the Small Business Administration. ‘Predators are circling around because that is where the deep pockets are’, Ms. Setzfand said.
“The AARP’s Fraud Fighter Call Center is receiving a rising number of complaint calls about self-employment frauds. The center fielded 150 such complaints from February to April, which was ‘more than twice as many as we had at this time last year’, said a center spokeswoman, Jean Mathisen.”