Rob Perry retired, then bought a Vermont screen-printing shop for $115,000 and named it Shirt Happens. Retirement, apparently, sharpens the pun reflex. He is 68.
Here is the part that makes the joke work. He has $1.5 million saved and $3,600 a month from Social Security. The shop throws off $50,000 to $60,000 a year. The business is not the meal. It is gravy on a plate that was already full.
He has company. The Journal’s profiles note that incorporations — new business filings — by 55-to-64-year-olds are up 22% in a decade.
An encore business — a venture started after the main career ends — can pay you in purpose as much as in dollars. The trick is making sure it never sends the bill to your retirement.
Gravy, not dinner
Margo Clayson, 68, runs The Mighty Microgreen about 15 hours a week. It earns her maybe $800 a month on top of $3,043 in Social Security. Nobody’s fortune — and that is exactly the point.
Roger Smith, 58, put $430,000 into a golf-simulator franchise. That sounds reckless until you see the denominator. It is under 10% of his $5.5 million net worth.
He also kept his sub-3% mortgage, in no hurry to pay it off. Why would he? T-bills — short-term government IOUs — currently yield more than his loan costs.
The sizing rule
The winners all share one quiet habit. They size the venture like a portfolio position, not a leap of faith.
Rule one: cap, in advance, what fraction of your net worth the business can consume. Treat that ceiling as non-negotiable, the way you would a position limit.
Rule two: stress-test the whole retirement plan with the business earning exactly zero. If the plan still works, the business is a hobby with upside. If it does not, the business is a threat wearing an apron.
The failure mode is rarely the first check. It is the third and fourth checks, written to rescue the first one. Decide now that those checks do not exist.
Plan the exit
Rule three: plan the exit before you enter. A business that only runs while you run it is not an asset you can sell. It is a job you bought.
Ask the unromantic questions early. Who buys this from you at 75? What is it worth without you behind the counter? If the answer is nobody and nothing, size it even smaller.
None of this says don’t do it. Perry, Clayson, and Smith all sound busy and happy, and their plans hold up even if the businesses don’t. That is the standard.
You do not need to know how year one turns out to know whether the structure holds. If you can already see how the encore idea sits against your plan, look now — check the roof before the weather turns.
Bring the idea to a review and we will size it next to your income holdings, like any other position. Fifteen minutes is usually enough to see whether the ceiling, the stress test, and the exit all hold.