As millions of baby boomers near retirement age, a new revolution is changing the way they think about their future. The traditional retirement model was to sock away as much money as possible in the form of stocks, bonds, retirement accounts, and maybe even some real estate. You'd work as long as physically possible--well into your sixties or beyond in some cases--and then, on a magical "retirement day," stop working. This of course started the investment account balances moving in the other direction, because the plan was to begin drawing down those accounts once retirement happened.


But several things are changing this approach. First, and probably foremost, is that people are becoming more and more concerned about the security of those all-important retirement accounts. The recent Wall Street meltdown focused these concerns very painfully. Second, once you stop working and start spending those retirement dollars, you are by definition on a budget. Many soon-to-be retirees are terrified of outliving their retirement funds--unfortunately a very real fear--because nobody wants to burden their children with personal care responsibilities or worse, wind up homeless. And finally, many boomers simply don't want to retire. They have too much energy, too much excitement about life and living, to simply stop working.

For these reasons, many older Americans are investing in small, home-based businesses. They are turning in their stressful commutes and demanding bosses for the security and fulfillment of owning their own small company. These businesses provide not only short term income, but long-term security as well, enabling people to begin an "active retirement." They work from the comfort of their homes, when they want to, but still have the benefit of ongoing revenues, instead of drawing down their retirement savings. It's a dynamic approach to an age-old problem because the retirement plan literally becomes self-sustaining. Obviously, the biggest benefit is that an active retirement based on a small business will never run out of money.

Twenty years ago, this retirement strategy didn't even exist, at least not the way it does today. Certainly, back then, it was possible to create a small business to augment retirement savings, but it typically required opening a bricks-and-mortar shop with the investment of significant amounts of capital. Today, baby boomer entrepreneurs are using the Internet to sell a myriad of products and services online, from the comfort of their own homes. These businesses require very little in the way of startup capital, and if executed properly, can become quite lucrative, often generating more income than the retiree's day job did.

The key to this active retirement model is sustainability. By starting a small business, the retiree isn't forced to draw down investment accounts. The business also helps the individual to stay active and engaged. It's a win-win, because these businesses not only provide for a happy and comfortable retirement, but a happy and comfortable life as well. It's something everyone facing retirement should seriously consider.

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