More retirees than ever intend to keep working past traditional retirement age. But age discrimination and job burnout pose major challenges to staying in the corporate workforce.
Entrepreneurship can be a viable alternative work route for retirees -- and it's getting more commonplace. Entrepreneurs ages 55-65 accounted for 26 percent of all startups last year, up from 15 percent in 1996, according to the Kauffman Index of Entrepreneurial Activity.
While an entrepreneurial startup may sound like a risky investment of capital, it doesn't have to be.
"Whenever I mention entrepreneurship as an option for working longer, people think it means draining your 401(k), spending capital and taking an enormous risk," says Chris Farrell, author of "Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community and the Good Life" (Bloomsbury Press, 2014). "But micro-enterprises allow you to work from home, take advantage of technology, not touching your retirement savings and using just a little money to experiment."
Farrell adds that if you think you have a service to sell, a micro-enterprise approach allows you to test it out. "Find out if there really is a market -- if there is, then you can commit more resources and perhaps round up more money," he says.
One way to do that: Test out your idea while still working.
Kimberly Palmer is nowhere near retirement -- at age 35, she works full time as a senior editor for personal finance coverage at U.S. News & World Report. But in 2009, she started writing and publishing in her spare hours Palmer's Planners, a series of personal financial planners that she sells on Etsy, the e-commerce website for handmade items. The business only generated $200 monthly at its peak, but it helped stimulate other freelance work and speaking events that brought her side income to about $10,000 annually. It worked so well, she wrote a book about it: "The Economy of You: Discover Your Inner Entrepreneur and Recession-Proof Your Life" (Amazon, 2014).
Micro-enterprises often leverage the entrepreneur's accumulated experience and knowledge, as Palmer has done. Another platform offering that kind of opportunity is Guru.com, which helps businesses connect with freelance workers. The site covers more than 160 fields of expertise.
"These marketplaces are valuing older workers in a way corporate America doesn't," says Jeff Williams, CEO of Bizstarters, a company that provides coaching and training to older entrepreneurs. "The customers don't care how old you are, so long as you can deliver the solution."
The best time to start a micro-enterprise? While you're still working. "If you get started before you retire or need the money, and can develop something that generates a couple thousand dollars a month, it can make an enormous difference once you do retire," says Judith Rosenberg, founder of The Sage Centers, a business incubator and resource center in Berkeley, California, for entrepreneurs 50 years and older. Most of the micro-enterprises Rosenberg sees are run by part-time entrepreneurs who put in about 10 hours a week.
Williams says the most successful ventures he's witnessed share three common traits: deep knowledge about a specific topic, the ability to consult or share knowledge about the topic, and the ability to sell their services online.
Some older entrepreneurs are even tapping into new shared-economy platforms such as Airbnb and Uber. Nearly 25 percent of Uber's drivers are older than 50, according to a study commissioned by the company recently. Farrell says he hears often from older entrepreneurs who have become de facto bed-and-breakfast operators via Airbnb. "It makes sense -- if you're comfortable with it from a security standpoint . . . it's a fairly easy way to make some money."
The two major challenges for newbie micro-entrepreneurs, Farrell says, are selling yourself and getting paid. "If you've always worked in the corporate world, it's getting used to presenting yourself as having a product or service that can solve your problem -- and the other is asking for money, because they've never had to do it before."
One downside to micro-enterprise is that it rarely provides a route to building up equity in a business that can be sold when it's finally time to fully retire.