Starting Over

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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."

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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."

Doris Goldberg, 70, a physician retired from the New York City department of health, turned a passion into a nearly full-time venture. Goldberg, who retired in 1995 and now lives in Woodstock, N.Y., began taking classes several years ago at the Woodstock School of Art. As she grew more accomplished and serious, she became a member of the Woodstock Artists Association, gaining valuable contacts and a deeper knowledge of the field. Working 25 to 30 hours a week, she makes a small profit by exhibiting and selling her paintings and prints. "This is very precious to me," Goldberg says. "Coming from a bureaucracy and a very organized kind of workplace made this endeavor both a real pleasure and an adjustment. I had to organize my time and be very self-motivated."

If you would like to follow the example of these second-stage entrepreneurs, where should you begin? Eva Wisnik, president of Wisnik Career Strategies in New York City, recommends starting by picking the brains of former colleagues and employers who can lead you to clients or even become your first clients themselves.

William Dennis, senior research fellow with the National Federation of Independent Business in Washington, a small-business lobbying group, advises that you capitalize on what you know and what you have had extensive experience with, either through working or pursuing a lifelong hobby.

"Think about your passions," says Marc Freedman, president of Civic Ventures, a San Francisco educational nonprofit that helps older Americans make fuller use of their talents. "Now is the time to go back to earlier dreams and try to make them reality."

If you plan to start a business in a field unrelated to the one you pursued in your career, first, of course, be sure you have sufficient interest and skills. Then consider acquiring additional credentials by taking continuing-education courses at a local college, university or technical school. This is much easier once you are retired and have the time to take classes and do the homework. McKeon, for example, took about $10,000 worth of classes in coaching over eight months and earned a professional certificate. "It was so worth the investment," he says.