Are Boomers Too Broke to Launch Businesses? Or Just Too Tired?

Over the past decade, the AARP, the Kauffman Foundation, and other nonprofits have started programs to help aging workers launch second acts as entrepreneurs—and extend their income-earning years amid fears that Americans aren’t saving enough for retirement.

Despite those efforts, research published last month by the Small Business Administration showed that workers approaching the traditional retirement age of 65 are less likely to go into business for themselves.

Now a new survey presents a puzzling set of results. Baby boomers are just as likely to see entrepreneurial opportunities as their younger counterparts, but they’re less likely to be entrepreneurs.

Americans between the ages of 55 and 64 were relatively more confident in their own ability to run a successful business and less afraid of failure (and the associated financial losses), according to the Global Entrepreneurship Monitor, which surveyed 5,700 U.S. workers. In other words, the late-career workers who completed the GEM survey look like better candidates to launch businesses than their younger counterparts.

Despite those characteristics, workers in that age group are substantially less likely to be running an early-stage company than respondents between the ages of 35 to 44, according to the GEM survey.

Two possible explanations: A greater share of the older entrepreneurs are high earners, according to the GEM survey. That may be a signal that banks are hesitant to finance older workers. If that’s the case, it might keep would-be entrepreneurs who are less well off from starting businesses, says Donna Kelley, professor of entrepreneurship at Babson College and one of the authors of the study.

Another possibility is that older workers are seeing entrepreneurial opportunities and taking a pass because they’d rather retire than expend the energy it takes to launch a business. While the GEM survey shows early-stage entrepreneurship falling off after the age of 44, the dip can be partially explained by broader labor trends. Adjusting for workforce participation rates, workers between the ages of 55 and 64 are about as likely as other age groups to launch a business.

If that second explanation is right, the organizations promoting entrepreneurship education for baby boomers may be on the right track. A 2013 Gallup poll showed that 73 percent of boomers expect to remain in the workforce beyond the time they’ll be eligible to begin collecting Social Security—in many cases out of financial necessity.

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