By John Solari
If you flip through the pages of the latest business magazine or read the online headlines you might be under the impression that twenty-somethings are leading a surge in entrepreneurship while baby boomers settle for more traditional business roles.
The reverse is actually true. As Dane Stangler of the Kauffman Foundation noted in testimony before the U.S. Senate last year, “Americans in the 55-64 age group start new businesses at a higher rate than those in their 20s and 30s. This has been true, by the way, in every single year from 1996 to 2013.”
At a time period where baby boomers were expected to be hanging up their suit and tie for golf cleats, they have actually dealt themselves back into the economy, investing in businesses formation, second careers and income-producing real estate. According to a recent article published by the Federal Reserve Bank of Kansas City, 34 million seniors self-identify as wanting to start their own business.
So what does the new retirement look like? Here are two trends that are reshaping what we consider “retirement” in an age where baby boomers are increasingly entrepreneurial.
From Employed to Self-Employed
Whether they are forming new businesses, becoming consultants or using their skills to become solopreneurs, baby boomers are striking out on their own and finding flexible second or third careers. They might not be heading to the office every morning at 8 a.m., but they are putting their decades of business experience and their significant investing power behind business ventures that keep them engaged and earning income past the typical retirement age. What is lost on many people who consider millennials the primary drivers of entrepreneurship is that baby boomers are typically much better positioned to take the leap into entrepreneurship. They have established business networks and significant capital to put behind a business or investment idea.
As the old adage says, there really is no substitute for experience. Baby boomers with decades of business experience have seen economic cycles come and go, scaled businesses or led corporate divisions. They are positioned at the end of their careers to take advantage of that knowledge. Whether investing in their own startup, a second career or real estate, you could easily make the case that the latter part of a career, when you have the most experience, is the best time to pull the trigger on business investments or entrepreneurial ventures. This is not to say that baby boomers should bet the farm on an untested business idea. Like all investment decisions, investing in the years leading up to retirement should be done with a margin of safety and a thoughtful approach.
Partnerships with younger entrepreneurs
Baby boomers’ deep business experience also sets up strong intergenerational business opportunities. Older entrepreneurs can advise younger entrepreneurs, setting up partnerships that combine young entrepreneurial energy and technological know-how with deep experience in operations and management.
Retirement for the baby boomer generation might never be a full-time schedule of golf, travel and beach lounging. We are increasingly seeing that this generation will keep one foot in the business world and retain that entrepreneurial energy even in “retirement.”
John Solari is the managing partner of J.A. Solari & Partners. He has 25 years of accounting experience and is also a member of the American Institute of Certified Public Accountants and the Nevada Society of Certified Public Accountants.