The biggest fear for many people these days is whether their nest egg will last throughout their retirement. One way to avoid outliving your money is to work longer—on your own terms.
While you may not be able to retire at 65 (or don’t want to), if you’re doing work that you enjoy in your own business, setting your own schedule, and fulfilling goals that you’ve set yourself—it may not even feel like work.
Many Baby Boomers and retirees plan to start a business or are already self-employed, and many of their businesses are turning a profit. Pursuing professional dreams while working for themselves has enabled many older self-employed workers to secure their financial future.
A recent survey by AARP found 10 percent of workers ages 45 to 74 plan to start a business and 15 percent of workers in this age range are already self-employed. Some started a business due to a job loss, others had already retired but weren’t ready to fully stop working.
On average, self-employed workers who are in their 40s or 50s spend nearly two decades working for themselves, the study found.
“What we see is that most of the individuals that start businesses later in life represent professional services,” said Jean Setzfand, vice president for financial security at AARP. “Whether it be lawyers or accountants, data processing that tends to be more of what we see in terms of older self-employed workers.”
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Mary Parker, a 59-year-old entrepreneur, spent more than three decades navigating two challenging industries before taking the helm of her own firm. After being downsized from her job as at auto manufacturing plant early in her career, Parker saw a job opening for a security officer.
Some people may have seen that as a step down from the managerial role she previously held. Yet, she saw the long-term potential of taking this position and started to learn the security business from the ground up.
“In terms of career opportunities, you never really think about a security guard being anything other than a guard. What I learned was the security industry is a very lucrative industry,” she said.
While rising through the ranks in that field, she felt she would be best fulfilled if she was running her own firm.
“Although my career in corporate America was very successful, I just believe that any time you work for other people there are so many limitations,” she said.
Like many self-employed workers, including Boomers, Parker focused on providing a service. In 2001, Parker founded ALL(n)1 Security Services, based in Atlanta, Ga., which provides security personnel and technology. As CEO, she runs a multi-million dollar enterprise with more than 200 employees.
Parker isn’t alone in her accomplishments. Most of those surveyed by the AARP said their businesses were successful.
“Once you have the life experience, you probably have a shorter pathway to being successful and that is something we’re seeing,” AARP’s Setzfand said.
Nearly three-quarters of older self-employed workers surveyed by AARP indicated that their business made a profit in 2011. This may explain why 9 out of 10 self-employed older workers believe it is not likely that they will have to give up working for themselves in the next year.
Parker certainly intends to keep running her business. Thanks to a diversified portfolio of retirement funds and real estate investments, she said she could retire in a few years, but she’ll probably just keep working.
“When I’m ready to retire in the next 3 to 5 years, financially I don’t have to worry about what that will look like,” Parker said. “I will not have to work, although I know I will continue to work.”
—Follow Sharon on Twitter @sharon_epperson