The Retirement Newsletter: Side-hustles and start-ups — is retirement your biggest start-up?

Issue Number: -71 — five reasons for and five against starting a business in your retirement

Photo by micheile dot com on Unsplash

Welcome

Welcome to issue in -71 — Side-hustles and start-ups — is retirement your biggest start-up?

For the last week or so, I have been thinking about starting side-hustles when I retire to boost my pension income. And I have released that retirement is a bit like starting up your own company, and that got me thinking — is retirement your biggest start-up?

Retiring

The first aspect of retiring that is like a start-up is that your life significantly changes. You go from working to not working. So, it is important that you get and manage that aspect of your retirement correctly. A bad start and a bad foundation could lead to a bad retirement.

But what about if you decide to start a business?

Retiring and starting a business

So, for the last 30 or 40 years, you have most probably had a job where you were employed by someone to do something. You were an employee unless you owned the company, in which case you were an employer.

And this week, it struck me. Once I retire, I will no longer be an employee. I will be unemployed unless I start some side-hustles to make money to boost my pension. If I do that, I will be self-employed.

A big change.

Luckily, though, I won’t be flying solo as a self-employed person, as I will have the safety net of my pension. A guaranteed income (hopefully) that will protect me against the failure of my side-hustles.

But there are pros and cons to starting a business or side-hustle in your retirement.

Five reasons to start a business in your retirement

Let’s look at five reasons why you might want to start a side-hustle in your retirement:

1. You have the time and the financial freedom to start a business

Well, you are retired. You will have the time and the financial freedom to start a business. Is there a better time to start a business? Plus, you do not have to worry about making money quickly as you have your pension.

2. You can follow your dreams and passions

Thanks to the safety net of your pension, you can follow your dreams and passions and turn them into a start-up. But, there is a danger — the enjoyment that you find in your hobby could turn sour once it becomes a business.

3. You can embrace your inner entrepreneur

If you have an inner entrepreneur — I do — then retirement allows you to explore that side of you. After all, there is a minimal risk because all you have to lose, assuming you don’t sink your nest egg into the project, is your time.

4. You will keep learning and challenging yourself

For me, this is the big one, as setting up a business in your retirement means you will have to learn new skills and challenge yourself. This is a real bonus as it will help keep your mind active and sharp.

5. You could bring in some extra money

Bringing in some extra cash is the second big thing about setting up a business or side-hustle in your retirement. Every little bit of extra cash helps, and the extra money can be used for special treats.

Five reasons not to start a business in your retirement

To balance things out, let’s look at why you shouldn’t start a side-hustle in your retirement:

1. Your side-hustle could be a drag on your time

You are now retired. You are now free, and starting a business could put demands on your time that you could do without. But, if you structure your hustle right and don’t make it a full-time job, your time could be managed. Think of the side-hustle as a flexible part-time job where you get to pick the hours.

2. Your side-hustle could be a financial burden

I covered this in number 3 above. Don’t sink your life savings, your nest egg, into your retirement side-hustle because if the hustle fails, you will be financially worse off than when you started. The side-hustle is supposed to bring in benefits, not problems.

3. You may not have the energy to run the business

Let’s face it; you will probably be old when you retire and may not have the energy you once did to run a successful long-term side-hustle. The side-hustle shouldn’t cut into your energy reserves, so you can’t do anything else. Likewise, your energy levels shouldn’t be a drag on the hustle.

4. You have no clear plan or idea of the product or service you want to offer

When you retire, you have limited energy and time. You need to spend them wisely, so it is essential to plan. You need to have a defined product or idea that you focus on. This will be my problem. I have numerous ideas I would like to try, and the danger is I try too many and bring none to fruition.

5. You have no clear goals — what is your escape plan?

Number five links in with four. You need to plan and focus. Set clear goals and have SMART objectives (Specific, Measurable, Achiev­able, Real­is­tic and Timely). If you don’t have clear goals, you will be wasting your time, and time is a precious resource in retirement. Also, it is worth thinking about how you can escape your side-hustle, be it a success or failure. You need an escape plan.

Your retirement start-up

You have to be careful here, as you don’t want your retirement start-up to become a drag on your time or your pension. But having said that, looking at my five pros and cons above, I think the pros outweigh the cons.

Also, you don’t want your side-hustle to become a distraction and prevent you from setting yourself up for a successful and enjoyable retirement.

Maybe, retirement is your biggest start-up?

What do you think?

Next week

Next week, in issue -70, I’ll be planning for the approach of winter.

Where did the summer go?

Thanks

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Until next time,

Nick

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