Midlife Entrepreneurship: Yes, It's A Real Trend

The stereotypical entrepreneur may be a twenty-something living on Red Bull and writing code well into the night. But real entrepreneurs have greying hair and a nest egg.

U.S. News reporters Emily Brandon and James M. Pethokoukis say that as boomers approach 60,

many of them who toil as wage slaves are surely asking themselves, "Is this all there is?" or "What comes next?" For a growing number, the answer involves leaving their current job--but not retiring. ... they're instead choosing to start a new chapter in their working lives, one where finally they're the boss.

But wait -- is this another case of a newsmagazine digging up anecdotes to create a trend where none exists?

No -- it looks like the demographics of people working for themselves really are skewing older.

While about 10.4% of the work force is self-employed, "middle aged or older workers constitute a disproportionate share because rates of self-employment rise with age," wrote two RAND researchers in the definitive study to date, "Self-employment Among Older U.S. Workers." Looking only at unincorporated businesses, self-employed workers 45-54 are 8.7% of the total -- compared to 7.1% of all workers. And older workers are more likely to be self-employed: 11.1% of the the 55-64 group are self-employed, increasing to 19.3% of 65+ active workers.

And the numbers are shifting toward more older entrepreneurs. Outplacement firm Challenger, Gray and Christmas analyzed some of this data and found that "boomers and older entrepreneurs now account for 54 percent of self-employed workers, up from 48.5 percent in 2000."

Not all boomers choose a second career as an entrepreneur -- sometimes they have no choice. We've written here about the hurdles facing older workers:

Thinking About Changing Your Career? Do It Before 50!

Age Discrimination: Middle-Aged Workers Face It Too

But on the positive side (we think), the RAND study also shows that many of the self-employed retired ... then started working for themselves (see table 6). And they're better off financially than wage and salary workers.

So next time you flash on the word "entrepreneur," try to free associate to someone drinking coffee instead of Red Bull, playing golf instead of XBox, and watching network TV instead of browsing YouTube.

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US News also covered "10 Ways to Pay for Retirement," which we highlighted here. That piece also points you to personal finance site Free Money Finance, which ran a commentary on the US News list.