• February 2016

Post-Retirement Decisions: Do You Want Your Spouse to Start a New Career?

By Sheldon Weiner
Financial Adviser
Partner, Egan, Berger & Weiner
Email: sweiner@ebwllc.com

Recently, my wife and I had to consider a problem that many retirees have had to face.

The issue: When Sharon retired a few years ago at age 65 from her long-time corporate job, quite frankly, she was not interested in staying home and becoming a full-time babysitter for our grandchildren. She wanted to continue to work, be of value, and bringing in some extra money.

The dilemma: She wanted to start her own business. But what would the consequences be? What business would she start? How many hours would she work? And what would the long-term and short-term return be on this investment?

Our options: Before we made a final decision, we did a lot of soul-searching. And fact-finding.

  • We found that Sharon is not alone in her desire to continue working. A survey by Encore.org, which helps older Americans find ways to use their skills, shows that 39 percent of the retirees surveyed were interested in starting their own business or a nonprofit organization. In fact, retirees (ages 55 to 64) accounted for 25.8 percent of the businesses started in 2014.
  • We considered whether it would be best for her to start a new business, or buy a franchise. While it may be easy enough to start a business, particularly a virtual one that requires no storefront or office space, the option is not for everyone. To be successful, you need to have the right idea at the right time and have the skills to get your product in front of buyers. At the end of the day, it is still a business, and running it well means you will have to be solving problems for that business all of the time.
  • We pondered whether the best idea would be for her to get a job doing something she loved. This was probably the least risky option, but it didn’t give her the independence or autonomy she craved.

Our strategy: Before coming to a conclusion, we did a lot of research.

1. We knew we’d need a solid business plan — one that is comprehensive and takes into consideration whether the business idea will work, how much it will cost, and how we would put it into action.

2. Next, we talked to professionals — accountants and lawyers — and considered our financial plan to make sure the business would be likely to succeed.

3. Then we evaluated Sharon’s skills. We needed to take an objective look at her ability to do all the tasks necessary to run the business. We discussed: What was she most passionate about? What was she good at? Did she have the capability to run the business? And we considered how much time it would take from other activities that she wanted to do — including traveling, playing golf, and just relaxing.

4. We also calculated how we were going to finance a start-up. While many businesses can be started with a minimal investment, if you need a large amount of money to get your dream business off the ground, you may need funding or investors, which could create more complications. We kept in mind the cardinal rule: Don’t invest money you cannot afford to lose.

5. We also talked about whether or not she wanted to hire employees, and if so, how many. Not all people are good at managing employees, and if that were the case for Sharon, then we would need to find a business that she could manage herself.

6. Mostly, we knew we wanted to protect our current assets. Bankruptcy rules vary from state to state, but we talked about what would happen if the business went down the tubes. Certainly, we didn’t want to lose our savings either.

7. We devised an exit strategy. After all, if you start a business when you’re 65, you may be ready to start slowing it down at 75 or 80. Would we leave the business to our children? Sell it? Or shut it down? Once we decided, we knew it was important to write down the plan and share it with the family so they were in on our long-term approach.

8. Finally, we got realistic. We knew that whatever decision Sharon and I made, we shouldn’t expect overnight success. Our 65 years has taught us that we might need to try several different things, or even radically change our initial business plan.

Our decision: In the end, Sharon bought a franchise called Kona Ice. Our son works with her, and they have already won awards!

We started with one truck, and a few years later bought a second, plus a mini-truck for indoor sales. Sharon sets her own hours, and is not hassled by superiors who are interested only in sales numbers and what time she arrives at work in the morning.

She’s also giving back to the community by raising money for charities, schools, and religious organizations by donating a percentage of sales. She meets many interesting people and fully enjoys her interaction with the children who buy her product.

The bottom line: Did we do the right thing? You bet we did! I now have a spouse who is happier than I have seen her in many years — and we have extra money coming in. But before jumping in to a new business, follow the steps we took to come to a decision that’s right for you.

Questions: As always, if you’d like to talk about the financial pros and cons of starting a business after retirement, feel free to contact me at sweiner@ebwllc.com.

Here’s to your success!

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