Forge Your Own Retirement: The Best Moves for a Boomer Startup

If you’re in your late 50s, a flickering career and daunting retirement costs may drive you to think you are the best person to forge your own business for the rest of your working life. That’s a bold move and maybe the right one, but the road comes with many pitfalls.

The Wall Street Journal reports that more boomers, concerned about retirement savings and less than optimistic about the job market, are becoming entrepreneurs: “According to the nonprofit Ewing Marion Kauffman Foundation, individuals between the ages of 55 and 64 represented 23.4% of the entrepreneurs who launched businesses in 2013 – up from 14.3% in 1996.”

“The [55 to 64] group also experienced a rising share of all new entrepreneurs, mainly because it represents an increasing share of the population,” the Kauffman report adds.

Entrepreneurs of any age face challenges, but boomers need to keep in mind special circumstances before launching a startup.

Don’t touch retirement savings. Whether funding a long-held dream or experimenting with a new business idea, mature adults must think twice before dedicating retirement funds to a business venture.

If you’re a boomer, you may already echo your peers in regretting long-term credit card debt and diving too fast into risky real estate purchases through your adult life. You now simply have less time to recoup biz losses before needing money for your golden years.

Nor will retirement costs – such as those for health care, to name just one – wait for you. According to research from HealthView Prime, a maker of forecasting software for retirement medical expenses, the average healthy couple retiring next year will face retirement health-care costs equal to some $366,600 in today’s dollars. In another 10 years, that price tag will jump to approximately $421,000.

Such hikes leave little margin of error for business losses.

Look for funding. The U.S. Small Business Administration (SBA) recently cited reports that say starting a new business from scratch costs, on average, more than $30,000. If you are fortunate enough to have family or friends willing to invest in your business, don’t be shy about accepting help.

You can also try:

Crowdfunding: In this collaborative funding via the Web, you use social media and crowdfunding sites to raise startup cash with thousands, if not millions, of tiny individual donations. Top sites include Kickstarter, Indiegogo and Crowdfunder.com.

Microlenders: These specialized nonprofit organizations lend to new businesses too small to hold much credit or collateral. The biggest include ACCION and Justine Petersen. Individual states usually offer opportunity funds for lending to new and small businesses, and the SBA also offers microloans averaging $13,000.

Business incubators: These organizations help entrepreneurial companies grow with such support resources and services as physical space, capital, coaching and networking. The National Business Incubation Association can tell you more and facilitate your meeting incubators.

Avoid bank loans if possible.

Start small. Boomer entrepreneurs, excited yet reluctant to take the plunge, can follow the advice for anyone looking to start a business: See if you can start your venture while you keep your regular job and transition into being a business owner over time.

Do research and get support: Look for workshops, classes and other resources for entrepreneurs at small-business development centers and local universities and colleges. Even if you have a solid foundation in your field, you can still benefit from networking other business owners at various stages in their ventures – and yours.

If you’re a boomer, you may feel like you’ve been around a long time. Maybe, but it’s still far from too late in your life to take a stab at your own business idea.

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Claire Emory, CFP, CFA, RIA, owns and operates Clarity Financial Planning LLC in Arlington, Va.

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