As with any new venture, advisors can and should help clients with prudent planning. “Start with a personal financial plan and a strategic business plan,” says Linette Dobbins, a certified financial planner at McGee Wealth Management, in Portland, Ore. “You need to have capital to start a business and have an alternative source of income while getting your business off the ground.”
Clients might need a lawyer to help draw up necessary papers, and they must be prepared to call in other experts if help is needed—with marketing or bookkeeping, for instance. Some of Dobbins’s retiree clients are “getting paid board positions [typically with their former employers] that keep them engaged but don’t take a lot of time,” she says.
While it may be unrealistic to expect to earn big bucks, that’s rarely the point. “Most people pursuing so-called second acts may not earn the same living they did before retiring, but if they’ve built a substantial nest egg and are realistic, that may be OK,” says Jeff Fishman, founder and managing member of JSF Financial in Los Angeles. “They’re not necessarily looking for financial success. For some, it’s a quest for fulfillment.”
Clients who want to change directions after retirement should “first test the waters,” he says, “[to] see if they’re actually good at what they wish to do. … Sometimes it’s better to let a fantasy remain a fantasy.”
On the other hand, Fishman had a successful client who, at 60, retired and broke into photography. “Our role was to structure his portfolio, largely by investing in tax-free municipal bonds, so that he’d have enough regular income to pursue his passion,” says Fishman. “Today some of his work hangs in galleries in New York and Los Angeles, and he is financially and artistically successful.”