Starting Over

David McKeon knew in his heart--and in his wallet--that he was too young to stop working. At 56, like thousands of other Americans of his generation, he was given early retirement by his company, which had been taken over and downsized. Why not, he decided, use his background in finance, information systems and managing people to start his own company? McKeon read books on business trends and got in touch with former colleagues and professional associations. The result: Success Planning Associates, an executive business-and career-coaching firm based out of his home in Berlin, Mass.

McKeon has 28 corporate and individual clients nationwide and abroad in such locations as India and Argentina. This year he may surpass the $110,000 salary that he was earning when he was downsized. "I knew that I didn't want to work under someone else's vision," says McKeon, who puts in about 50 hours a week on his venture. "I like thinking of myself as the lead sled dog. It's a great feeling."

Layoffs, early retirements, resignations prompted by disillusionment with corporate life--all are producing a host of 50-pluses who feel too young and vital to consider not working and whose stagnant or shrinking retirement savings demand that they continue to earn a salary. "Retirees want and need to keep working now more than ever before," says Rudy Lewis, president of the National Association of Home-Based Businesses in Owings Mills, Md. "But they prefer not to do it on someone else's time clock at this point in their lives."

In fact, Lewis says, retirees who have recently left the corporate world, both voluntarily and involuntarily, are starting their own businesses at a 15% higher rate than those who stopped working just three years ago. Adds David Corbett, CEO of New Directions Inc., a Boston consulting firm that helps senior-level executives transition into new careers: "There is an extended middle age these days. Retirement occurs at 80 to 85, not 60 to 65. People are not ready at 65 to move to Florida and play golf seven days a week."

Phillipa Kafka certainly wasn't. Kafka, 70, a former professor of English literature at Kean University in Union, N.J., and her husband Oliver Kenen, 56, a former high school physics teacher, moved to Boulder City, Nev., after retirement. There they turned a long-standing passion for design, decoration and fixing up old homes into a business by starting Boulder City Upgraders. Since 2000, the two have renovated and sold one house and have begun work on three others in Nevada and California. After expenses, the business brings in from $50,000 to $75,000 a year, according to Kafka. "We wanted to supplement our income. Retirement money doesn't earn that much in the stock market today," she says. "This is a great, fulfilling way to keep busy, productive and fit."