Going Your Own Way
Baby boomers are rewriting the rules of retirement again. This time they're tapping their nest eggs as entrepreneurs
Certainly middle-age angst and a quest for personal fulfillment are big drivers for many boomer entrepreneurs. They were for Mary Rooney Sheahen, 56. The registered nurse and former hospital CEO runs Wild Clover Day Spa. The full-service spa (Turkish salt scrubs, seaweed baths) is located at a boutique hotel in Galena, Ill. "I was an oncology nurse early in my career and saw the effects of stress and illness," Sheahen says. "To be able to be on the prevention end was a dream come true." Even better, Sheahen also gets to work with her husband, Chuck, who retired from being a firefighter about 18 months ago. "He is instrumental in many ways at the spa," she says. "The staff call him 'Rico the Towel Boy,' and they love having him around to fix things."
The catalyst that prompted Sheahen to "take the plunge" was one that many boomers can relate to: She lost her job in a corporate reorganization in 2000. That shake-up provided her with not only the need to find another job but the means as well--she got a great severance package. The financial windfall from a severance deal or a pension buyout gives older entrepreneurs a huge edge over younger risk takers. "Such packages can be repositioned toward new business costs or give them much larger borrowing power at the bank," says small-business consultant Anita Campbell. "They are more likely to be seen as good credit risks with collateral to back up a small-business loan."
Of course, most workers aren't going to get downsized, offshored, or outsourced. More likely, they will simply find themselves in their 60s without the financial ability to retire. Sure, maybe they can tap into savings to maintain their current lifestyle. But what if disaster hits and dries up those lifelong savings? A 2005 Merrill Lynch survey found that the unpredictable cost of illness and healthcare is by far boomers' biggest fear. They are about three times as worried about a major illness (48 percent), their ability to pay for healthcare (53 percent), or winding up in a nursing home (48 percent) as about dying (17 percent).
Then there are the kids. Boomer marketing expert Phil Goodman notes that his research shows that two thirds of boomers say they feel obligated to financially help their adult children: "So for most of them, [starting a business] is not because they don't know what to do with their time; it is because they have to work."
And work they do. Starting your own business may bring lots of emotional and spiritual fringe benefits, but it means lots of long hours, too. John Nicholson and his wife, Marnie, run Company Flowers & Gifts, Too! in Arlington, Va. A former journalist and lobbyist, John Nicholson, 69, retired from that world at age 56 and bought an old flower shop. "We figured we had to learn the business from someone else," he says. "In reality, we probably overpaid for a customer list of mostly dead people, but in doing so we felt more confident about doing better."
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