Working is the new retirement. But not just any kind of working--baby boomers are launching their own small businesses to help fund their golden years while keeping themselves busy.
[In Pictures: 10 New Retirement Hot Spots]
A recent survey by the Kauffman Foundation found that baby boomers are the fastest-growing group of entrepreneurs. The Center of Productive Longevity, which hosts meetings on entrepreneurship for the 55-and-older crowd, attributes that trend to that fact that many baby boomers are forced to leave the workforce before they're ready or can afford to retire.
"You always have to think of yourself as You, Inc., even if you're working full-time. What could you moonlight as and do full-blown later on?" says Kerry Hannon, author of What's Next? Follow Your Passion and Find Your Dream Job. She recommends getting started three to five years before retirement, for financial as well as health reasons. "Unless you have a pension that's turning out money, it's nice to know you have a little money," she says, adding that people who work longer tend to stay healthier as well.
Hannon recommends keeping start-up costs low and creating a new email address and social media presence that's independent from any full-time work, to avoid potential conflicts of interest. "Create a separate identity yourself," she says.
[In Pictures: The 10 Best Places to Retire in 2012.]
Ready to experiment with a new side-career yourself? Here are three success stories for inspiration:
Bling maker. Febe Hernandez, a long-time employee of a federal agency in the Washington, D.C., area, first fell in love with beading at a friend's birthday party in 2010. "All my life I've been making things, and this really set it loose," she says. She started giving her jewelry away, until a friend suggested that she sell it. She had her first show a few months later and sold around $2,000 worth of jewelry. Over the next year, she created a website for her business, built a social media presence, and started showcasing her jewelry at more events.
Because she works for a federal agency, Hernandez, 59, is careful to follow all of the ethical rules and guidelines. Her agency's internal affairs office vetted her website and business and she gets permission before doing any media interviews. "We're allowed to have outside employment if they perceive no conflict of interest," she explains.
Hernandez plans to continue to grow her business, and after she retires she wants to work on it full-time. "I see us opening stores, growing our staff, and I plan for it to provide income in retirement," she says.
Natural artist. Morgan Hoth, now 63, first started experimenting with weaving and dyeing rugs and silk when she had summers off from teaching special education students. "When I got close to retirement, I decided, 'That's what I want to do,'" she says. From her home in Richmond, Va., she creates silk scarves and neckties and sells them online, through Etsy and other online venues.
Hoth kept her start-up costs low, by using a $6 steam iron from Wal-Mart, for example, and she says she and her husband live frugally. That allows her to treat her income from her scarf business as "extra" income that can purchase luxuries, such as a trip to Europe or a new sofa, as well as help friends in need. "I couldn't live on it, but I can help if someone I love is on hard times," she says. The income has also funded a new Tempur-Pedic mattress and road trip. She and her husband both have small pensions that cover their basic expenses.
Her main motivator, though, is the pleasure that creating art brings her. "The only thing that really counts is enjoying life...I have so much fun creating things," she says.
Banker-turned-card designer. For years, Dorothy Atkins kept her side business as a greeting-card designer a secret. She worked for a bank in various client service and human resources positions. "It was totally unrelated to the card business--different sides of the brain," she says. She used her commutes into San Francisco to brainstorm and sketch potential designs, and focused on her banking job from 8 to 5. Then, during her lunch hour, she visited local shops to see if they wanted to sell her cards. "I got a couple of clients that way," she says.
Over time, she honed her technique and figured out how to cut costs, by purchasing her card stock from lower-cost shops for artists, for example. "Now I'm more cost-effective," she says.
After she retired in 2002, she devoted more of her energy to her art and card business. (Atkins also paints.) "I don't think I'll ever stop working. I'm just not wired that way," she says. Her father, who lived into his nineties, often said, "Do as much as you can for as long as you can"--a maxim she continues to live by.
More From US News & World Report