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Tips for starting a business after retirement

Finder asks a panel of 5 experts what their top financial tips are for starting a business after retirement.

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elderly man working on art business

For some, retirement is the endgame. In retirement they will travel, rest, or perhaps create if they’re interested in the arts. Others wish to continue working after their retirement. It can be financially daunting to start a business and many American’s don’t believe they have, or will, have enough to retire.

We spoke to a small panel of 5 experts to get their professional advice on starting a business after retirement. Each expert has a background in finances, money management or retirement directly.

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Cassidy Horton
Banking & investing writer
Finder

1. Where should you be financially if considering starting a business after retirement?

You should be in a position where you can cash flow expenses without taking on new debt. The last thing you want to do is drain your retirement fund while trying to get a new venture off the ground.

Begin by calculating start-up costs, which will vary depending on the type of business you start. A consulting business may require little money, while opening a retail store may require substantial capital. If you don’t have enough money to cover these costs, open a savings account for your new business. Sock away funds until you can pay cash for everything — that way you don’t jeopardize your security in retirement.
If your business idea requires a lot of upfront capital, it may also be wise to consult a financial adviser beforehand. An adviser can evaluate your personal finances to see if you’re financially stable enough to start a business. They can also help you minimize taxes and navigate any regulatory hoops you may need to jump through.

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Rick Pendykocki
Founder, Self Directed Retirement Plans LLC

2. What’s your number 1 finance tip for starting a business while in retirement?

Treat the new business as an asset. Not only are you the trustee of the new plan you also manage the C – Corp and are responsible for investment options available to the plan. And remember, don’t add stress and become miserable in your “golden years”.

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Rob Stephens, CPA
Founder
CFO Perspective

3. What are the biggest risks of starting a business while in retirement?

Retirees usually have a larger net worth than other business founders. This can be a source of financial strength for the company. It also means you have more to lose to business creditors. Make sure to use a legal entity for your company that projects your personal assets from company creditors. Buy the correct amount of insurance. Use an attorney to build a business structure and contracts that protect your assets.

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Ted Jenkin
CEO and Co-Founder
Oxygen Financial.

4. What are the biggest potential rewards of starting a business while in retirement?

You can have fun doing something meaningful. Most people work a job before retirement to ‘pay the bills’. Having your own business can allow you do something fun and meaningful in retirement more than just working a 9 to 5 job.

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Gordon Polovin
Board Advisor
Wealthy Living Today

5. What are the biggest risks of starting a business while in retirement?

Running into cash flow problems at the most inopportune moments and tempting the retiree entrepreneur to dig into crucial retirement nest-eggs. It doesn’t matter if you launch a business before or after retirement. A business is a business, and cash flow pressures stand as threat #1.

Final thoughts

Never be afraid to ask for guidance when starting or while in the midst of your business venture. If you know of someone already in the niche that you are looking to get into, reach out. Contact a financial advisor to make sure you have all your ducks in a row. If you are considering getting a loan talk to an underwriter and see what insight they can give you. Continue seeking information to help you better reach your goal.

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