Aging While … Working for Yourself

Editor’s Note: This Generations Today column, “Aging While...” is sponsored by AARP Foundation. It focuses on creating and advancing innovative solutions that help older Americans build economic opportunity and social connectedness.

After decades as a successful Fortune 500 corporate marketing strategist, New Yorker Peggy Hill wanted to retire early and start her own marketing consultancy. Then, AARP Foundation’s Work for Yourself@50+ (WFY@50+) program changed her mind.

During the workshop, exercises in the program’s Five Simple Steps to Get You Started toolkit prompted Hill to think about what brings her joy, where she excels and where she has seen a demonstrated business opportunity. This self-reflection made her realize she would much rather teach yoga than be a marketing consultant.

For many years, Hill had witnessed and experienced the workplace stress for which yoga had been an antidote. “Yoga makes a difference in productivity, in creativity and in office camaraderie. I like to teach, I’ll enjoy myself, and I may bring hope to someone,” she said. In 2018, using the tools, support and insight from the program, Hill launched Yoga with Peggy H, which is now a profitable business. (She paused her business for a period of time when COVID-19 in NY was raging, but is now building it back.)

WFY@50+ is the only national initiative that helps low-income adults ages 50 and older explore and pursue self-employment. AARP Foundation provides free online resources and partners with economic development organizations to provide comprehensive resources for aspiring entrepreneurs, including hands-on help, coaching and mentoring to meet the needs of diverse populations and localities.

Since its 2016 inception, WFY@50+ has served approximately 26,000 adults in 39 states and in D.C., in coordination with local partners. Participants running businesses when they took the workshop on average increased their annual revenues by almost $11,000. Since the pandemic, Work for Yourself@50+ also in 2020 launched the Work for Yourself@50+ Freelancing Resource Center, which has online lessons, workshops and a work directory to help older adults excel in the gig economy. 

COVID-19 has made our work to spur entrepreneurship more urgent than ever. As of mid-May, 39 percent of workers in low-income households earning $40,000 or less had lost work. With so many low-income families lacking resources to pay rent or put food on the table, building long-term financial resilience has never been more of a priority.

While the popular image of an entrepreneur is a tech-savvy 20-something working in Silicon Valley, the data shows the reality skews older. Approximately 116 million Americans are older than age 50, and they make up more than a third of the U.S. population. This number has grown significantly over the past two decades and will continue to do so as baby boomers age.

Over roughly the same period, this group came to comprise the largest proportion of new entrepreneurs and the majority of American business owners. By 2019, more than half of America's small business owners were older than age 50, a third were between ages 50 and 59, 17 percent were ages 60 to 69, and 4 percent were ages 70 and up.

Why Older Adults Become Entrepreneurs

As the entrepreneurs profiled in AARP Foundation’s new report, “Cultivating Entrepreneurship” demonstrate, entrepreneurship is an increasingly attractive option for older adults who want or need to keep working, for many reasons.

Living longer. Men in the United States who are age 65 today can expect to live 18 more years on average, compared to 1960 when it was 13 more years. Similarly, women who are age 65 can expect to live 21 more years on average, compared to 1960 when it was about 16 years. These lifespan increases, combined with rising living expenses, mean that Americans older than age 50 must make their savings and earnings last far longer than did earlier generations.

Economic insecurity. Forty percent of today’s ages 50 and older population is of low- to-moderate-income; this jumps to 50 percent for those who are ages 65 and older. Their challenges include:

  • Wage stagnation and higher unemployment. Real wages have stagnated over the past 40 years for all but the top 10 percent of earners, despite steep increases in the cost of living. Further, older adults in the low- to moderate-income category have higher unemployment rates—in 2017 almost four times higher than their higher income peers.

    Unemployment is especially high among Black, Hispanic and Native Americans. Many get discouraged by the low wages and job insecurity and turn to self-employment as a better option. As one WFY@50+ workshop participant explained, “I was laid off after years working clerical in a law firm and … hospitality … I found myself indefinitely out of work; and the pay scale for the work I could find was so low. I decided I had to be creative and artistic and explore self-employment.”
  • Limited savings. More than half of low- to moderate-income older adults have less than three months of expenses saved. When financial emergencies arise, they are forced to use retirement savings, if they exist, jeopardizing their financial futures.
  • Social Security shortfalls. More than a fifth of married couples and 45 percent of unmarried individuals ages 65 and older who are Social Security beneficiaries rely on Social Security for 90 percent or more of their income. However, the average annual Social Security benefit in 2019 was $17,521, perilously short of the $25,704 an older adult in good health with no mortgage requires to live independently. Older adults in poor health, with a mortgage or rent payments, or those living in high cost areas, need about $50,000 annually to live independently.

Greater fulfillment. For people like Peggy, entrepreneurship represents a choice to pursue an “encore” career focused on reinventing oneself for greater fulfillment. Forty-two percent of entrepreneurs older than age 50 say they launched their businesses to pursue their passion.

Older Entrepreneurs Are More Likely to Succeed, But Still Need Help

When it comes to starting a business, age has its advantages. A person who is age 50 is 2.8 times as likely to establish a successful high-growth startup as a person who is age 25, and more than twice as likely to start an extremely successful company as is a 30-year-old.

Success in starting a business seems to increase with age, even into one’s 60s and 70s. A 60-year-old is three times as likely to launch a successful startup as is a 30-year-old—and 1.7 times as likely to start a business that winds up in the top 0.1 per cent of all companies. Still, many low-income older adults need confidence, skills, capital and connections to succeed at launching and growing their own business.

Entrepreneurship as an Engine of Economic Development

It is in our interest to help older adults succeed at starting their own businesses, because their success can provide new opportunity for the business owner, their employees and their community. Small business, in aggregate, is a real engine of economic development, creating two out of every three new jobs in the economy.

Rose Guccione, who is profiled in our report, is a perfect example of the multiplier effect. She founded, a singing telegram company, to help opera singers at the beginning and end of their careers who needed more income. After taking our workshop and a business-planning course, Rose gained the skills she needed to successfully expand her business nationwide and create more jobs.  

AARP Foundation has a longstanding commitment to developing programs and tools to increase financial resilience for vulnerable older adults. With many facing ageism in the workplace and other structural challenges to financial security, entrepreneurship is a powerful tool to increase financial health. WFY@50+ provides the inspiration and social capital needed to help older adults believe self-employment is possible. Those who become successful business owners demonstrate why entrepreneurship matters as a vehicle for economic security and economic prosperity across the United States. Click “Cultivating Entrepreneurship” to read AARP Foundation’s new report.   

Lisa Marsh Ryerson is the president of AARP Foundation, in Washington, DC.