Common retirement goals generally include: more travel, more socializing, a reduced workload, enough money saved to last throughout retirement, and enough money and/or insurance put aside for anticipated medical emergencies. Combine planning for the above with a well thought out, yet modest, retirement income and a worry-free lifestyle can result.
Many antique dealers retire at age 65 but continue to work for five, 10, even 15 years. Some of the advantages of working after age 65 include: The ability to travel extensively, including Europe and the Far East, and write off the cost as a business expense. The ability to sell acquired assets as monetary needs arise (collector/dealers, read the last sentence several times). The benefits of continued social contact with ones peers and with others who share a common interest. The benefits of the physical activity of simply doing the work at a show or shop.
As with all retirement options, careful planning is a must. Who will own your retirement business, you or your spouse? The answer to this question may depend on who will retire first, who has a pension plan that may be affected by a continued income, and personal considerations such as who is the leader and who is the follower when it comes to maintaining a part-time retirement business.
If your home is furnished with antiques, who owns these antiques, you or your business? When you sell that $10,000 painting that you bought at a flea market twenty years ago, are you selling personal property or inventory? The fact that it hung over your fireplace twenty years means little to the tax people. Did you pay sales tax on it and can you prove that you did by producing a twenty-year old receipt. If you did not pay the sales tax, should you do so now?
The distinction between personal property and inventory may not matter now but you may want to keep such antiques separate once you retire. More than thirty years ago, I bought an antique as a gift for my wife. At the time, I made $42 a week. The antique cost $350, more than two month's pay. Both my children have expressed an interest in this antique and it will probably stay in the family. It is personal property. I did pay the sales tax. I have yet to determine how I can divide one antique into two pieces. Maybe the Wisdom of Solomonī comes with old age.
Many antique dealers who plan on working after retirement are placing some of their inventory in long term storage. I have a dealer friend who is retired. Most of his new inventory comes from the third floor of his barn. Twenty years ago he began placing un-saleable items, remnants of box lots, and things he had paid too much for on the third floor. Today, these once unwanted or over-priced items are adding thousands of dollars to his retirement income.
He also put many desirable antiques in storage. Recently, he sold a rare medical antique to me that had been tucked away for a long time. He did me no favor on price, nor did I expect to be treated differently simply because we have known each other for years. The fact is that he gave me preference by calling me first. I will do well with this medical antique despite its high cost.
I am no fan of the collector/dealer. Such dealers are harmful to my antique business. They subsidize their purchases with monies earned outside the antique trade. They pay too much for what they buy, they sit on unsold items too long, and they sell for less markup than is necessary to make an actual profit. They are in the antique trade to build a collection not to make a profit.
Two of my major competitors at auctions are collector/dealers. Whenever I see both at a given auction, I simply leave. I have found that it is not worth my time for the possibility of buying the one or two low-end items that they may not want.
However, when a collector/dealer retires and sells his or her collection as part of a retirement business, that dealer makes more money on each individual piece then a professional dealer such as myself could hope for in the short term.
In 1968, I purchased a cased firearm inscribed " Made by Ely Whitney of Cotton Gin Fame". I bought the firearm from a dealer in Rockland, Me for $175. I sold it to a collector/dealer in Waterville, Me for $350. I made a substantial profit on this sale. The buyer told me that he was buying rare guns that he hoped to sell during his retirement whenever he needed extra money. Recently, this person died at his brother's home in Florida. I am not to certain if he still owned the gun. If he still did, his widow can expect to receive many times the purchase price.
I remember this transaction well. The buyer was impossible to out-bid at local auctions and I considered it a type of payback to overcharge him for items I knew he could not resist. The sale took place at the kitchen table of his home. His wife was angry because of my high asking price.
I could have put the gun away for my retirement instead of selling it for a quick profit. However, at the time the income from my antique business made my car and house payments, paid for expensive health insurance, put food on the table and clothes on the kids. Placing an antique in storage for more than thirty years was not an option I could afford to consider at that time.
If the idea of antiques as a retirement business sounds good to you, start planning now. There are many scenarios upon which one can build a customized retirement business. I will detail one common scenario here.
At age 60, begin dividing your antique purchases into two categories, inventory and personal property. If you are self-employed, you probably have monies put aside in some form of an IRA. At age 70, you must begin withdrawing this money whether you need it or not and it will be taxed as regular income.
Suppose that you retire at age 65 and receive your full Social Security Benefits. You keep on working full time until age 70. Between age 65 and 70, you will probably have an income higher than you need. The extra money can be parked in CDs or a Money Market Fund. However, in the year in which you turn 70, you do not want a high income or any extra income at all. This will reduce the amount of tax you must pay on your IRA withdrawals.
Here are some possible options: Sell your entire inventory before age 70 and turn in your sales tax number. You may then dispose of your personal property as you see fit. Sell most of your inventory before age 70 but keep your tax number. This will allow you to keep traveling as a dealer and to keep writing off those travel expenses.
Many dealers continue to do shows well into their eighty's. For many such dealers, these shows are more social than financial. If this sounds like something you may want to do, perhaps you should put merchandise away now for that purpose. Or, maybe this is the time to sell your personal collection of TeaPots.
The success of a retirement business depends on how well it is planned. Talk with your spouse, your accountant, and your financial advisor. Speak with other retired dealers to find what they did and what they wished they had done.
Antiques as a retirement business can provide income, travel, a social outlet and more. It can do this best if it is a well thought out part of your total retirement plan.