Investing - Retirement
Launching Startups in Retirement
When Atkins was offered a buyout in 2002 at age 60, she was caught off guard. "The package scared me to death. I had not planned for not working," she says. After meeting with human resources to discuss her options, she went to Nordstrom (JWN) and took comfort from a little shell-shocked shopping, buying a pair of shoes and some Godiva chocolate. Later that week, after reality had sunk in, she consulted her wish book and realized she wanted to turn her doodles into greeting cards.
Now Atkins has a successful company called From Where I Sit. Her cards are sold in museums and high-end boutiques. Her income doesn't match her old salary, but provides a good supplement to her retirement savings.
More older workers are trying to make second or third careers work. The unemployment rate for persons aged 55 and over hit 7% in October, continuing the recent trend of high jobless rates for older persons not seen since the late 1940s, according to an analysis of Labor Dept. data by Sara Rix of AARP's Public Policy Institute. The average period of unemployment is nearly 34Â weeks for older job seekers, more than 13Â weeks longer than it was at the start of the recession. "The chance of a 60-year-old finding an ad on Craigslist that says, 'Wanted: Vice-president of marketing and sales. Must be 60 to apply' doesn't exist, so you might as well take your skill set and make it into an encore career," says Mary Furlong, a baby-boomer marketing expert and author of Turning Silver into Gold: How to Profit in the New Boomer Marketplace.
Making a leap into a second or third career may mean taking financial risks. Some people use severance payments as seed money. Others tap credit cards, family, savings, even retirement accounts. Dipping into reserves to fund the next stage of your life may not feel great when cash flow is a concern. But it's often necessary.
Melding Expertise Ideally, a later-in-life career change means turning a passion into a profit-making enterprise, as Atkins was able to do. It also often involves finding a way to blend different areas of expertise, which is what Laurie Orlov is doing. From 1998 to 2007, Orlov was an analyst at Forrester Research (FORR), a technology research firm. A well-respected figure in the tech arena, she also served as the primary caregiver for her mother, even self-publishing a book for caregivers called When Your Parents Need Elder Care: Lessons From The Front Lines (it cost $1,500 to produce). After her mom died in 2006, Orlov moved to Florida and began thinking of ways to meld her skills. Last March, she launched Aging in Place Technology Watch, a research firm analyzing the market for technologies that help boomers and seniors stay in their homes.
To gain an edge in the field, Orlov, 58, spent about $5,000 to get an online graduate certificate in geriatric care management from a local university. Starting a blog has also been crucial to building credibility, she says. Orlov makes a point of accepting speaking engagements as well as attending conferences to get the word out about her business. "If I pick up a new client at every conference I attend, it is worth the registration and travel costs," she says.
Another place to make connections and find resources to help build a new career is your alma mater or local college. Michael Lesner, who is "fiftysomething," worked for decades as a marketing and media executive at firms such as Leo Burnett and CBS (CBS) before founding AcuNetx, which makes diagnostic tools to prevent senior citizens from falling. He's using his marketing and media experience to serve as a board member and mentor for MBA candidates at Pepperdine University's Graziadio School of Business. "It's an incredible networking tool," he says. He persuaded the graduate school to use his new venture as part of the curriculum. In return, he's getting free marketing, financial, and management advice.
Finding Seed Money While Atkins, the card entrepreneur, got a buyout package that equaled more than a year's pay, not everyone has the luxury of a retirement package or savings to fall back on. That leads some people, like Adele Douglass, to raid retirement accounts.
After working as a lobbyist on animal rights and children's issues, Douglass left her job at 57 and cleaned out her retirement savings, worth more than $80,000, to launch Humane Farm Animal Care, a nonprofit in Herndon, Va. Her organization certifies that livestock for meat, poultry, and dairy products was treated humanely. She doesn't regret using her savings. And with the popularity of the local-food movement, the timing was perfect. Thanks to her group, she says, nearly 23Â million animals were raised under certified humane standards last year, up from 143,000 animals in 2003. Her financial safety net right now, she says, is her three children: "My kids would never let me be out on the street."
Other self-starters have tapped into the value of their homes—an option no longer available for many would-be borrowers. Connie and Thomas Betts sold their Portland (Ore.) home in 2003 and bought a farm in central Oregon. They sold their 41-foot sailboat for $50,000, and used the money to buy the four pregnant alpacas and a herd sire needed to start Cascade Alpacas ranch. They also borrowed $30,000 to buy inventory for a yarn shop on an American Express (AXP) OPEN Card, a credit card geared to small business owners.
The business is thriving. They have 50 alpacas and make the bulk of their income selling pregnant females to other farms for as much as $22,000 each. Recently, to cover the cost of purchasing a neighboring farm, Connie, 56, who formerly worked as a writer of technology training manuals, returned to work. For now, that leaves Thomas, 55, a former marine-supplies executive, to run the ranch and shop on his own. The trade-offs are worth it, says Connie. "It's a wonderful life."