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Retirement a Fresh Opportunity for Older Entrepreneurs — and Advisors Serving Them

For an increasing number of Americans, the word “retired” is a bit of a misnomer. Perhaps “redirected” is more like it. Demographics and the lingering aftermath of economic stresses on employers are major drivers behind a trend in which workers who are displaced — involuntarily or voluntarily — seize the opportunity for professional rebirth. For many, that means starting their own businesses.

This trend has been around for a while. The Kauffman Foundation, an organization that supports education and entrepreneurship, found that between 1996 and 2012, entrepreneurship among Americans aged 55-64 grew more than for any other group in the age 20-54 range. Entrepreneurship grew for those aged 45-54 and 55-64, while it dropped for those age 20-34 and 35-44.

In an interview with Bloomberg’s Steve Matthews, Kauffman VP of Research and Policy Dane Stangler attributes the trend to longer healthy lifespans and older people’s desire to continue working and earning. Matthews also reports that more older Americans are starting businesses because they consider their employment opportunities to be limited after age 55, they need to augment their retirement savings or they want to be their own bosses.

Michael O’Donnell, regional project manager for Startup Quest, concurs that it is a pronounced trend among those over age 50. He also told Matthews that the Great Recession is at least partly to blame, noting that the age 50+ entrepreneurs were laid off and know that the jobs they had are gone for good.

What does this mean for advisors? For one thing, FAs may find expanded opportunity to recruit clients among the older entrepreneurs who start businesses. But plan advisors may find some opportunities as well. After all, those new businesses may be establishing retirement plans of their own. Suddenly, the plan participants become the sponsors.

John Iekel is a writer/editor for ASPPA and its sister organizations, including NAPA Net.

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