We decided to record a three-part series about setting up your own business in semi-retirement, because we have seen it working successfully for many of our clients.
When we say ‘set up your own business’, we are talking about becoming self-employed. And we use the term ‘semi-retired’ because if you run your own business, you are still working and earning an income – not fully retired.
Instead of fully retiring at the age of 60, many people simply reduce their workload to part time instead. Doing this as well as starting your own business can have a lot of financial benefits. Of course, it’s not for everyone. In the subsequent podcasts and blogs, we will outline who exactly it would suit, and how to go about the set up – but initially, we’ll simply discuss why this could be a viable option.
Retirement used to be black-and-white – you work full time until you turn 65 and then retire. But now it’s moving into more of a grey area where people prefer to work flexible hours first. Of course, this can be more difficult as an employee, but if you run your own business it can be a lot easier. More often than not, your hourly rate is better when you have your own business and you are an expert in your field. Additionally, you are doing exactly what you want to do in terms of the work.
Retiring completely can be a big drop in income – and understandably, many people want to avoid this. Starting a business can be tough financially, and many people try to do it while they have another income – for example working casually or part-time. The same thing can be said for that period of semi-retirement – if you still have a bit of income, you are not relying solely on your business, which takes away the pressure. When you are nearing retirement, you might not want to work full time anyway, and you certainly don’t want to be stressed about earning enough to live off, and that you have enough to put into your super.
On the flipside, if you start your own business and generate (for example) $30,000 a year, while it may not seem like much, this extra income going into your super will make a huge difference in the long run when you consider compounding interest. Setting up your own business can give you an extra boost financially if you are not where you’d like to be in terms of your super. And if you have a partner who is still working full time, this can also ease the financial burden.
Since we experienced the pandemic, and with so many people working from home, flexible working arrangements and remote communication have become more and more common. Now, people don’t care whether you have a big flashy office or employ 20 staff – people simply care about finding the right person for the job. So if you have a business that you are able to set up at home, have low overhead costs or the ability to work from anywhere, this is a huge benefit. We will discuss this further in the upcoming blog.
Case study One of our clients, Kathy, is a dental hygienist who is extremely passionate about developing dental health in children. She recently started her own business, and helps Michael’s daughter Margot with jaw grinding. She is a good example of someone who is an expert in a specialised field, bringing a wealth of knowledge to her clients. Like many, Kathy dropped her hours to part-time work – 4 days, then 3 days, then 2 days, as her business grew. Now, she can choose the hours that she works, and she can work from anywhere to give guidance and advice to children and parents – which suits her lifestyle well as she often travels to the States to visit her daughter. For Michael, it doesn’t make a difference where the Zoom call is conducted from – only that Margot is all smiles at the end of the call and willing to do her exercises after speaking with Kathy.
Keep an eye out for our upcoming podcasts about who should set up their own business, and how to go about it.
Listen to the related podcast here!