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Retirement Is Not a Dead End
Americans today are living longer than ever and enjoying an active lifestyle at a more advanced age than their parents ever did.  A famous saying from a decade or two ago was, “Forty is the new thirty.”  When it comes to business owners, though, you might say, “Seventy is the new fifty.”  Even though the traditional retirement age is 65, many people work well beyond that, correctly believing that remaining physically and mentally sharp in their golden years will greatly improve their overall quality of life.  Others choose to work longer due to economic concerns, as retirement funds and pensions have taken a financial hit in recent years.  Embarking on a second career can be a very rewarding experience, and many retirees choose the route of buying a franchise.

Franchising After Retirement
Because there are so many kinds of franchises out there—retail, consulting, service-oriented, and so on—it is amazingly easy for retirees to uncover a franchise opportunity that bears some relationship to the things they learned during their business careers.  It is hardly necessary to have been a corporate executive to succeed in one’s franchise retirement.  First of all, buying a franchise means taking advantage of a major corporation’s brand awareness, proven business plan, and thorough training.  If you have previous management experience—great!  You will have a leg up when it comes to supervising your employees.  But the training you receive when you buy a franchise will generally teach you everything you need to know about running that enterprise, and ongoing assistance is usually no more than a phone call away.

Financing Your Franchise Retirement
One of the more challenging aspects of a franchise purchase involves coming up with the money to buy it.  Most franchises charge an upfront franchise fee as well as requiring its franchisees to have a certain amount of ready cash in order to keep things running smoothly while the business gets off the ground.  Franchise fees can be as low at a few thousand dollars, but most range from $25,000 to $50,000.  If you buy a franchise that requires its own building, that could run into some serious money—in the neighborhood of several hundred thousand dollars or more.  Even with the recent economic downturn, most retirees have plenty of money in their IRAs, Roth IRAs, 401(k) plans, and pension funds.  When withdrawing this money for retirement, regulations abound regarding how much you can take out over what period of time.  In many cases, going against those rules will cost you dearly.  Penalties for early withdrawal—prior to age 65—are equally steep, and the tax consequences of such action will diminish your nest egg even further.

Tax Laws to the Rescue
In the event you have retirement money to spend, and you are anxious to become an entrepreneur even before your “official” retirement—getting a jump on the competition, you might say—the tax law was revised in the 1970s to allow you to invest that IRA money (or similar retirement account funds) in a new business without considering it as a taxable distribution.  Obviously you should consult a financial advisor to look into your own personal situation, but using the equity in your retirement fund to buy a franchise can make you look like a financial genius.

Two Benefits in One
Most CDs and other fixed investment vehicles earn very little interest these days, and money market accounts invested in common stocks are always vulnerable to volatility.  Although running a business is never a sure thing, retirees who choose to use their set-aside funds to bankroll the acquisition of a franchise will enjoy dual benefits.  For one thing, they take active control of the growth potential of their savings.  By working hard and following a plan perfected by franchisors over the course of many years and countless successful franchisees, they have the potential to enjoy serious profits.  Second, remaining busy and creative keeps both the mind and the body active.  This is a prescription for continued physical and mental health well into one’s “retirement” years, whether you actually retire or simply choose to enjoy a franchise retirement.

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