Baby Boomers are not putting their feet up. Today Boomers are more likely to start businesses than are Millennials, according to Forbes.com’s Brian Scudamore, author of “Why Baby Boomers Are Ditching Retirement To Launch Their Own Businesses.”
Scudamore nicknames this group “retire-preneurs”—people using retirement funds to become their own boss.
Forbes.com’s July 2018 Small Business Trends for Baby Boomers survey reports that 86% of business owners over age 50 got into business ownership through starting or buying independent businesses; 14% purchased franchises. Half used cash; 25% used 401(k) funds to capitalize the new venture. The remaining 25% borrowed from friends and family, used a line of credit or got an unsecured loan. The report continues that since people over 50 have more in their retirement accounts, they are also more likely to rely on Rollovers for Business Start-Ups (ROBS) which allows individuals to use money from their 401(k) or IRA to finance a startup.
With the life expectancy for ages 65+ now 84.4 years, the average Boomer is spending 19 years in retirement, according to Businesswire.com.
FannieMae.com noted in its 2016 survey that a home is the most valuable asset for most adults near retirement age, dwarfing retirement accounts, other financial assets, and other nonfinancial assets. Indeed, many retirement security experts argue that the conventional three-legged stool of retirement resources—Social Security, pension and savings—is incomplete because it ignores the home.
Nearly 13 years ago, The New Retirement Survey conducted for Merrill Lynch by Harris Interactive/Age Wave, forecast the interest Boomers have today in staying vital. The 2005 study concluded that 76% of Boomers plan to retire from their current job/career at about 64 and will then launch into an entirely new job or career.