Does the gig economy intrigue you? Have you ever wondered what side hustle you’d be best at?
According to a recent report issued by Precision Reports, the gig economy will nearly triple in the next five years. In addition, the rate of monthly new business formations, after nearly doubling at its peak at the onset of the Covid pandemic, remains 33-50% above pre-pandemic levels.
And it’s not limited to just young people.
Much has been said about the attraction of the side gig on the part of Millennials and Gen-Zers. But would you believe more than one out of ten over the age of 55 have side hustles, too?
“As the baby boomer generation enters retirement age, many are finding that they still have a lot of energy and ideas to offer,” says Inez Stanway, CEO of Live Laugh Create in Atlanta. “As a result, post-retirement entrepreneurship is becoming increasingly popular. There are a number of reasons for this trend. First, retirees often have more time to dedicate to their businesses. Second, they typically have more experience and knowledge than younger entrepreneurs. Finally, retirees often have access to financial resources that can help them get their businesses off the ground. Whatever the approach, post-retirement entrepreneurship can be a great way for retirees to stay active and engaged in the workforce.”
What does it mean to have a “side hustle” in retirement?
Think of retirement as your full-time job. Between your savings, Social Security and a pension (if you have one), retirement generates some level of income that pays for your living expenses. A side hustle wouldn’t consume too much time from your regular retirement activities, and it would generate a few extra dollars which you can use to offset inflation, take an extra trip or buy your grandkids bigger birthday gifts.
It’s not unusual to see people transition to retirement through what might be called a side business.
“I’ve seen people have success with entrepreneurial endeavors in a consulting role,” says Gerald Grant III, a financial advisor at Equitable Advisors in Miami. “Many have worked for large companies for their whole career and have gained an enormous amount of knowledge and experience. They can then utilize this experience to provide services to their current or comparable companies who need their expertise. By working as a consultant, they can design their work schedules around their retirement lives, enjoying the freedom of retirement while still generating additional income.”
Charles Catania, Principal of Branding with Chuck in Vernon, Connecticut, has also “seen a great deal of success for those launching consultancies in their area of expertise, especially in a tight labor market. Many are looking to get out of the daily grind of a 9-5, but they still have a core competency and expertise in a particular area of need. For example, there is demand for catastrophic nurse case managers that can prepare Medicare set-asides and other medical cost projections on a case-by-case basis. Taking years of experience and launching a work-from-home consultation service in this arena is often well-received, particularly during labor shortages.”
You can reimagine retirement by using a transitional phase like this.
Phoenix-based Ari Parker, best-selling author of the Medicare book, It’s Not That Complicated, works with thousands of Americans who are approaching retirement across the country. He’s found that the definition of retirement is evolving.
“Many people want to share their expertise within a specific industry to educate a younger generation,” says Parker. “Teaching is often a popular second career post-retirement. The beauty of choosing this profession is the sky is the limit when it comes to the niches people can specialize in. Some retirees with a strong track record in a specific industry can teach at local community colleges. There are also a myriad of tutoring programs retirees can sign up for.”
Many who have left their careers behind them find they can provide useful services to people just like themselves. Shawn Manaher is a former financial advisor who has founded five online businesses. He is a coach, speaker, podcast host, and author based in New York City. He says, “Some successful examples of post-retirement entrepreneurial endeavors that I’ve seen are those who have looked into the gig economy. Many start by just wanting to generate extra cash, but end up being able to make a full-time income within a year’s time.”
Plenty of gig platforms exist that retirees can take advantage of to start a small side business (or two).
“There are many apps like DoorDash, Lyft
You needn’t limit yourself to a pre-existing template. You may prefer the challenge of starting from scratch or simply following a personal passion.
“Most of the people I work with do get into a business post-retirement,” says Chuck Czajka, Founder of Macro Money Concepts in Stuart, Florida. “However, it’s mostly hobbies that have turned into a business. For example, some make furniture and sell it on the side. Others use their expertise in the field they worked in to start consulting businesses.”
Sometimes it’s not a hobby at all but an activity that you love doing. You may discover there’s something you want that’s not being provided. Once you figure out how to provide it for yourself, it’s not a great leap to provide that same service to others who enjoy that same activity.
“After retiring in 2010, a colleague of mine purchased a fifth-wheel trailer and began traveling,” says Levon L. Galstyan, Certified Public Accountant at Oak View Law Group in Glendale, California. “He was disappointed with what was available on the market while outfitting the trailer with necessary lighting—lanterns, flashlights, etc.—and he decided to create his own. Three years later, he co-founded his company, which designs high-performance lighting products for adventure and travel.”
Galstyan offers another example, too. “I know of one person who started her own business after retiring in 2005,” he says. “She and her husband built their custom bag tag company, which expanded to tags for scuba and water sports and is now sold in over 200 retail shops. They moved the company to Shopify in 2016.”
If you worked as a professional, you might find it far easier to maintain a side gig in retirement years.
“In the legal field, a growing number of professionals are retiring from law firms or in-house roles and doing freelance work,” says Raad Ahmed, CEO + Founder of Lawtrades in New York City. He says his company, which is a digital marketplace that connects freelance legal professionals with companies for on-demand support, “has seen increased interest among legal professionals of all ages, including those nearing retirement, over the past couple of years as people seek more flexibility and control in their careers. Seasoned legal professionals who are starting to wind down their roles are leveraging platforms to take on a few clients and a small number of hours, which allows them to bridge the gap between full-time work and official retirement. This ultimately eases the transition by letting them continue to share their expertise on their own terms while starting to embrace the next chapter of their lives once they’re fully ready to retire.”
Beware, though, for there is a dark side to this urge to start a post-retirement side hustle. And, if you’re not careful, it can cost you. A lot.
“The largest area of entrepreneurial failure tends to be around the food service industry, in that a lot of people believe that their ability to cook for their families easily translates to opening either a restaurant or a catering business,” says Amy Greene LoCascio, Principal and Managing Partner at Eamon Capital Management in Pittsburgh. “In an industry where the failure rate is already high, those who are approaching retirement have even more to lose in throwing their fortunes into such a challenging industry.”
Worse, this financial distress can be encouraged by less-than-reputable promoters who try to take advantage of your sometimes too-big (and unrealistic) dreams.
Yes, there are those who realize their dreams, but this is by no means a sure thing.
“I have seen many older people become franchisees and earn handsome amounts,” says Steven Holmes, Director of Operations at iCASH in Hawkesbury, Ontario, Canada. “The business model provided by franchises is appealing. A built-in brand recognition, business strategy and marketing and promotional materials are just a few of its many benefits. Once the business has begun operating, you can choose a group of managers to oversee hiring and operations, allowing you to maintain a part-time active involvement and the ideal balance most people seek at this stage of life. It’s significant to know that franchisees typically earn between $60,000 and $70,000 per year, with a wide variety of upfront fees that might be rather costly.”
The moral of the story here is clear. Your retirement years are supposed to be relaxing years. And sitting back while selling lemonade at a roadside stand certainly qualifies as relaxing.
On the other hand, running the lemon farm that supplies those lemons and worrying about an early killing frost isn’t relaxing.
Don’t spend your retirement working on the lemon farm. Let someone else do that. Focus on sipping your lemonade and, every now and then, maybe pouring a glass or two for a friendly customer.