Starting a business

Boomer entrepreneurs bet nest eggs on dreams

USA Today
Rodney Brooks

These Baby Boomers are doing what they love. And they used their retirement savings to do it, using a process called rollovers-as-business-startups (ROBS) to finance their businesses.

Editor's note: I am very leery of this new technique, but people are doing it. What happens if the business goes bust and now their retirement nest egg is gone as well?

4 Rewarding Alternatives To Retirement

Huffington Post
Yagana Shah

Sixty-five is no longer the magical age it once was, when you assumed you'd be able to retire and spend the rest of your life leisurely relaxing on a beach with your nest egg. For a number of reasons, from the economy to rising costs of healthcare and education, more and more post 50s are delaying retirement.

In fact, 82 percent of post 50s polled said they would continue to work for pay in retirement and nearly half said they'll retire later than they expected, according to an Associated Press-NORC Center for Public Affairs Research poll released this month.

The new retirement: Leisure

Katy Read

Chris inherited her family’s farm, but has no interest in farming. So Chris, an artist, decided to transform the rural property into studio and housing space for artists, featuring a kiln, looms, painting areas and a metalworking shop, surrounded by nature trails decorated with her partner’s original metal sculptures. Jim, a retired engineer, had a longtime hobby of testing home energy-saving devices, applying his engineer’s skills to sort the valuable from the junk.

With Bleak Job Prospects, Parents and Their Children Buy Into Franchises

“In the U.S., the economy has been rough since 2008,” said John DeHart, co-founder and chief executive of Nurse Next Door. “You have a lot of seasoned executives getting packages, and they’re looking for new careers. And you have this disproportionately high unemployment in the under-25 group. With that you get the dad/grad trend.”

Beware!! Creative Solutions to Fund Your New Business

It's sad to see someone get to retirement without enough money to make it through. It's even sadder to see someone save all their life and then lose it needlessly. Many Boomers realize that retirement may be the perfect time to start a new business, maybe that business you've always dreamed of owning. But Boomers have two things that make them attractive targets for schemes that may or may not be in their best interest: they may have a pool of cash that they saved up for retirement and some significant equity in their home.

Using Retirement Money to Start a Business

New York Times
Josh Patrick

Some franchises are promoting a strategy known as ROBS, which stands for Rollover as Business Start-Ups, where you roll over your IRA to fund the start up cost of the business. The I.R.S. has not prohibited so-called ROBS transactions, but the agency hasn't declared them legal either. Which is a good reason to be very cautious about taking a chance that might cost you penalties and taxes. But I also have another concern about the strategy — and that’s what happens when a business owner attempts to exit from a company formed this way.

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