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Business

PERSONAL FINANCE

Many are shunning retirement for startups

On his 65th birthday, physical therapist Gary Kinsey incorporated a company that makes medical devices.

‘‘It is a huge risk,’’ said Kinsey, now 67, owner of North Florida Medical Solutions Inc. in Gainesville. ‘‘I have sunk everything I have into it the last two years. I have put myself out on the line.’’

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Increasingly, older Americans are shunning retirement to start companies because they see limited job opportunities after age 55, don’t have enough savings to retire comfortably, or want to work for themselves. People ages 55 to 64 started 23.4 percent of companies in 2012, up from 14.3 percent of new entrepreneurs in 1996, according to the Kauffman Foundation’s research.

‘‘The 30-year corporate job with a gold watch isn’t there anymore,’’ said Dane Stangler, vice president at Kansas City, Mo.-based Kauffman. ‘‘A lot of people are not ready to retire. We are living healthier for longer, and they are looking for a main income or a supplementary income.’’

Mark Zuckerberg started Facebook while a student at Harvard University, but experienced managers may be better prepared for startups, said Jeff Mariola, 59, who in October started Chicago-based Digital BrandWorks, which acquired an e-commerce company, www.buyhappier.com.

‘‘I have always wanted to own my own business,’’ said Mariola, whose company has 18 employees and offers Internet consulting services to manufacturers. He said it may employ 150 people in four years. ‘‘It is your baby.’’

He is drawing on his experience as president of Ambius, having managed a unit with more than 1,200 employees. Ambius provides art and plants to offices. ‘‘Having experience is critical,’’ Mariola said. ‘‘Banks are generally conservative and want to be sure management teams understand cash flow and balance sheets, the things that underpin a business.’’

More startups are on the way. About a quarter of Americans ages 44 to 70 are interested in creating a company or nonprofit venture, according to 2011 research by Encore.org, which studies baby boomers’ plans for new careers.

The average age of 500 recent applicants for a Florida entrepreneurship program funded in part by the US Labor Department was 51, said Michael O’Donnell, regional project manager for Startup Quest in Fort Lauderdale.

‘‘People over 50 are seriously exploring startups as an option,’’ he said. ‘‘These are highly educated people that were laid off in the last downturn and realize those jobs are not coming back.’’

Florida, a retirement destination, has been attracting older people who migrate to form businesses, said Andrew Duffell, chief executive of the Research Park at Florida Atlantic University in Boca Raton. The park includes a technology business incubator to assist startup companies, with ‘‘a good 30 percent’’ run by those over 50.

The incubator includes companies that develop software, manage logistics for transportation of products such as medical devices, and do advanced engineering.

Americans 55 and older may have more confidence in their abilities than prior generations, demographers say.

‘‘Baby boomers are more educated and probably more entrepreneurial than earlier generations,’’ said William Frey, a senior fellow at the Brookings Institution in Washington.

They are more likely to own homes and have assets that can be used to finance businesses, said Kenneth Johnson, senior demographer at the University of New Hampshire’s Carsey Institute.

Joseph Schmoke, 69, ran a for-profit college in Birmingham, Ala., until 2010, and was dismayed that smaller colleges such as his were typically ignored by ratings services. In 2011, he founded University Research & Review, which has two websites that help students select from among smaller colleges and now has four full-time and seven part-time employees.

‘‘I am tired of boating,’’ said Schmoke, who started his business in the Boca Raton research park. ‘‘I don’t play golf. I am in good health. I want and have the energy and need to do something. We can have a positive effect and probably make a little money, too.’’

The increase is part of a trend of older Americans working longer. Sixty-five percent of those ages 55 to 64 were working or seeking a job in 2012, up from 56 percent in 1992. By contrast, the workforce participation rate for those under 45 has fallen over the past two decades, according to the Labor Department.

More plan to work past the traditional retirement age of 65, as well. About half of all workers aren’t confident they will have enough money to retire, a survey by Washington-based Employee Benefit Research Institute found in March.

A pickup in new ventures by older Americans could help overall job creation. Research by economics professor John Haltiwanger of the University of Maryland in College Park found that startups and young firms account for a disproportionate share of job creation, exhibiting what he calls an ‘‘up or out’’ dynamic — they either grow fast or they fail.

For many entrepreneurs, their companies are as much in response to a lack of jobs matching their skills as about an effort to strike it rich.

‘‘If you are laid off from a decent job, if you start your own business you don’t have to worry about the biases of any personnel office as it looks over applicants’ resumes,’’ said Gary Burtless, a senior fellow at the Brookings Institution and a former economist at the Labor Department.

Kinsey formed his business nine months after losing a job as a wellness director for a physical therapy company in November 2010, when the US unemployment rate was 9.8 percent. That was close to the 10 percent high reached in October 2009, after an 18-month recession ended in June that year. After not finding good-paying opportunities, he started planning an alternative.

His medical device is aimed at avoiding urinary tract infections that are common at hospitals. Kinsey said he has raised money from ‘‘friends and family, small angels’’ to fund a venture that has four employees.

While the company to date has only ‘‘a couple of small sales, not anything substantial,’’ Kinsey said he’s optimistic that hospitals will adopt the device. ‘‘We feel like we have a viable product that can address a serious problem,’’ he said.

Success is far from a sure thing.

Bruce Fischler, 63, of Plantation, Fla., lost a housing-related job in 2012 after home prices slid and foreclosures surged. He formed a drug company with the hopes of commercializing a university patent for a treatment for osteoporosis, only to find that running clinical trials would take an ‘‘enormous amount of money.’’

‘‘The company is dead in the water,’’ he said. ‘‘I am going to go back and take a j-o-b.’’

Yet for many older employees the options in the labor market are limited, entrepreneurs say.

‘‘There is an age bias that is out there,’’ said Dale Sizemore, 61, who created Community Approvals Inc., a Georgia company that assists filmmakers in getting government permission to film on location. ‘‘It is a discouraging environment.’’

Having lost his job in September 2010, when the company he worked for was sold, he sent out resumes and talked to job recruiters. Sizemore said he didn’t find anything that suited his skills, which had been used in marketing software.

Now he’s planning to hire his first employee in early 2014.

‘‘Retirement for me was not an option — not financially, not mentally, not career-goal-wise,’’ he said.

‘‘I am happy with where I am. A lot of the stars and planets are beginning to align.’’

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