Should Small Business Owners Work In Their Senior Years?
If you are a small business owner aged more than 65 who wishes to continue doing business in your 60s or 70s, you certainly aren’t alone. As noted in the Financial Times, over-50s are ‘the new business startup generation’. Many have opened their business later in life because they have money to invest and may find that job prospects are lacking. If you were one of these brave founders of startups or small businesses, you may wonder if retiring at 65 is a wise decision. Around 19% of people aged 65 or over in America are choosing to remain in the workforce. Not all of them are doing so out of necessity; many find that continuing to be active employees or business owners enables them to stay active, feel productive, and maintain important ties.
What Are The Financial Benefits Of Keeping Your Business Open?
In their report Gig Economy and the Future of Retirement, Betterment found that seniors are taking advantage of the ‘gig economy’ to its full benefit, with around 76% of people aged 55`using a gig economy job to save for retirement. If your small business is landing lucrative contracts in this pro-freelance environment, it makes little sense to retire, since you can quickly build a nest egg that will enable you to lead a comfortable life when you decide your current lifestyle is no longer for you. There is another financial plus to retiring later: the big tax advantages you can obtain as a small business owner. Bear in mind that social security tax is only due on the amount you pay yourself; the rest of your business’ profit (in effect, your income) is not subject to tax. You can save thousands per year, though this may mean receiving a smaller benefit later in life. It is up to you to weigh the pros and cons of this strategy.
The Health Benefits Of Working Longer
In addition to bringing greater wealth in your retirement years, keeping your business open can also wield significant health benefits. A study by researchers at Oregon State University found that healthy adults who retired at 66 instead of 65 had an 11% lower risk of dying of any cause. Even those who had some kind of illness but stayed active in business or as an employee enjoyed this benefit. Other studies have shown that the main reason for this phenomenon is purpose. Older people who choose not to retire can find greater meaning from their lives and can also feel that they are contributing more to society. Social ties are also key; many seniors appreciate the chance to meet and connect with friends and clients at work: it keeps their mind agile and instils a sense of being part of something greater than themselves.
If you are a small business owner who would like to stay in the game longer, there are many ways you can do so without tiring yourself or stopping you from engaging in hobbies you enjoy. If you wish to free up a little more time, think of how you can delegate tasks involving your core competencies, so you can concentrate on management. This will free up a little more time but ensure that your business acumen continues to be the driving force behind the continued growth of your company.