Here is the traditional retirement model: to sock away as much money as possible in the form of stocks, bonds, retirement accounts, and maybe even some real estate. In addition you work as long as physically possible-well into your sixties or beyond in some cases-and then, on a magical “retirement day,” stop working. Consequently this started the investment account balances moving in the other direction, as the retirement plan was to begin drawing down those accounts once retirement came.
There are several things that change this method.
The first one is that people are becoming more and more worried about the security of those all-important retirement accounts. The recent Wall Street meltdown focused these concerns very painfully. Some people even started to save the money with circulated silver coins, but this is already a tough market (though a year ago only few would think about this kind of oppurtunity).
The second, you are by definition on a budget when you stop working and start spending those retirement dollars. Many soon-to-be retirees are scared of outliving their retirement funds. That is a reasonable and a very real fear, as nobody wants to burden their children with personal care responsibilities or even worse, wind up homeless.
And finally the third point is that many boomers simply don’t want to retire because they still have too much energy, too much excitement about life and living.
That is why many older Americans are now investing in a small, home-based business and they are turning in their stressful commutes and demanding bosses for the security and fulfilment of owning their own small company. To make it clear in few words these businesses provide not only short-term income, but long-term security as well, and at the sane time enabling people to begin a so-called “active retirement.” Another advantage is that they work from the comfort of their homes, when they want to, but still have the benefit of ongoing revenues, instead of drawing down their retirement savings.
There was not such kind of retirement strategy some years ago, at least not the way it does today. Certainly then it was possible to create a small business to augment retirement savings, but it typically required opening a bricks-and-mortar shop with the investment of significant amounts of capital. Today, baby boomer entrepreneurs are using the Internet to sell a myriad of products and services online, from the comfort of their own homes.
Sustainability is the key to this active retirement model. If a small business is started, the retiree isn’t forced to draw down investment accounts. It also helps people to stay active and engaged. Such kind of business provide a happy and comfortable retirement, and in addition a happy and comfortable life as well.