Need to Work in Retirement? Think Small

More retirees than ever intend to keep working past traditional retirement age. But age discrimination and job burnout pose major challenges to staying in the corporate workforce.

Entrepreneurship can be a viable alternative work route for retirees–and it’s getting more commonplace. Entrepreneurs age 55-65 accounted for 26% of all startups last year, up from 15% in 1996, according to the Kauffman Index of Entrepreneurial Activity.

While an entrepreneurial startup may sound like a risky investment of capital, it doesn’t have to be. A “micro-enterprise” can help retirees generate supplemental income without putting much capital at risk–perhaps enough to forestall filing for Social Security or ease the pressure for drawdowns from retirement portfolios.

1“Whenever I mention entrepreneurship as an option for working longer, people think it means draining your 401(k), spending capital, and taking an enormous risk,” says Chris Farrell, author of Unretirement (Bloomsbury Press). “But micro-enterprises allow you to work from home, take advantage of technology, not touching your retirement savings and using just a little money to experiment.”

Farrell, senior economics contributor at American Public Radio’s Marketplace and a contributing editor at Bloomberg Businessweek, adds that if you think you have a service to sell, a micro-enterprise approach allows you to test it out. “Find out if there really is a market–if there is, then you can commit more resources and perhaps round up more money,” he says.

One way to do that: test out your idea while still working.

Kim Palmer

Kim Palmer

Kimberly Palmer is nowhere near retirement–at age 35, she works full time as a senior editor for personal finance coverage at U.S. News & World Report. But in 2009, she started writing and publishing in her spare hours Palmer’s Planners, a series of personal financial planners that she sells on Etsy.com, the e-commerce website for handmade items. The business only generated $200 monthly at its peak, but it helped stimulate other freelance work and speaking events that brought her side income to about $10,000 annually. Side-gigging worked so well for Palmer that she wrote a book about it–The Economy of You: Discover Your Inner Entrepreneur and Recession-Proof Your Life (AMACOM, 2014).

Micro-enterprises often leverage the entrepreneur’s accumulated experience and knowledge, as Palmer has done via Etsy. Another platform offering that kind of opportunity is Guru.com, which helps businesses connect with freelance workers; although the site started with a focus on information technology, it has expanded to cover more than 160 fields of expertise. Other examples include Elance and Fiverr.

Jeff Williams, Bizstarters.com

Jeff Williams, Bizstarters.com

“These marketplaces are valuing older workers in a way corporate America doesn’t,” says Jeff Williams, CEO of Bizstarters, a company that provides coaching and training to older entrepreneurs. “The customers don’t care how old you are so long as you can deliver the solution. In the corporate world, it’s still about your resume, how you look, or how much they will have to pay you.”

The best time to start a micro-enterprise? While you’re still working. “If you get started before you retire or need the money, and can develop something that generates a couple thousand dollars a month, it can make an enormous difference once you do retire,” says Judith Rosenberg, founder of The SAGE Centers, a business incubator and resource center in Berkeley, California, for over-50 entrepreneurs. Most of the micro-enterprises Rosenberg sees are run by part-time entrepreneurs who put in around 10 hours a week.

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