For some baby boomers, retirement is a dirty word
For months after Rick Lehrer sold his share of his insurance company to a business partner, he continued to show up to the office three, sometimes four days a week, wearing a designer suit, a beautiful tie and a starched shirt.
A baby boomer accustomed to long hours at the office, Lehrer, now 76, didn’t like — and still doesn’t like — the word retired. “I was in denial,” he said of his half-hearted attempt to retire in January 2019. “I was officially retired but I really didn’t announce it in a way. that I should have.”
Lehrer’s reluctance to leave created a confusing office dynamic with his designated successor Art Grutt, who had come on board in 2006 with the understanding that he would take over 15 years later, when Lehrer would have turned 75.
“There was this uncertainty because Rick would always come into the office and be present but what was his role as a founder and figurehead without always being the owner?” Grutt said.
The office staff often approached Lehrer with questions when in fact it was Grutt who was in charge.
More than a year after his failed attempt, the pandemic interrupted Lehrer’s trips to the office. Like many companies, Cambridge Life switched to remote working and Lehrer had to come to terms with his retirement.
“I don’t mean he was hanging on, that sounds negative,” Grutt said. “But the pandemic forced him to make the transition.”
Baby boomers, a group now between the ages of 58 and 76, make up a large percentage of entrepreneurs. Although there are no hard numbers, 30% of business owners are between the ages of 55 and 64 and 20% are over 65, according to the Census Bureau’s annual business survey, or more than 2 million companies in total.
Like Lehrer, many of these entrepreneurs have opted out over the past year, their decision to do so may have been accelerated by pandemic-related reasons: dissatisfaction with remote work, fears of contracting the coronavirus and a greater appreciation of how fragile and precious life is.
Overall, 50.3% of American adults 55 and older said they were out of the labor force due to retirement in the third quarter of last year, according to a Pew Research Center analysis of latest official labor force data. In the third quarter of 2019, before the start of the pandemic, 48.1% of these adults were retired.
“For the first time in more than 25 years, we are seeing a marked decline in the labor force participation of older Americans and a marked increase in the share of them who are retired,” said economist Richard Fry. work at the Pew Research Center.
Lehrer was so attached to his job – a job that over the years has sometimes taken him away from his family due to long hours – that he needed an outside lawyer to help him deal with the retirement. He contacted the US Small Business Administration-backed nonprofit SCORE for advice. Through SCORE, Lehrer was assigned a mentor named Norman Sherman, himself a retired baby boomer entrepreneur.
“He couldn’t pull the trigger,” Sherman said of Lehrer. It’s a struggle faced by many of Sherman’s baby boomer mentees.
“The concept of letting go of their business and letting go of their identity is a very difficult thing to do,” Sherman said.
Lehrer agreed. “I just wasn’t ready to cut it,” he said. “It was very uncomfortable.”
The two worked together to come up with a plan and it seems to be working. Lehrer spent a quarter of the year in Florida in 2020 and 2021. He learned pickleball. When Sherman and Lehrer last met online for a mentor-mentee meeting in December 2021, Lehrer said he had finally accepted his retirement.
“We celebrated,” Sherman said. “Then I said, ‘The first thing you need to do is give your work email address, your email account, because I need you to cut out all the remnants. “”
That final cut wasn’t the hardest part, Lehrer said. That’s partly because, against Sherman’s advice, Lehrer kept his Cambridge Life email address, which he now uses to do pro bono insurance advice.
The hardest part was giving up the 45-minute drive he made every day from Westchester to his office near Madison Square Garden, Lehrer said.
“What’s hard is giving up on leaving home and going to work,” he said. “All that process of thinking about work on the way to work, mentally planning your day.”
The new generation of leaders stepping in are changing business practices to suit their own work style and ethics, incorporating more technology and delegating tasks rather than shouldering the entire workload like some baby boomers, known for the long hours they spend in the office, did it once.
Grutt expanded the business and spread the workload. When he joined Cambridge Life in 2006, the business was generating around $500,000 in revenue a year and had four employees. Today, the company generates approximately $4 million in revenue and has 16 employees. Grutt has also brought in a third partner to help it grow.
“The reality for me was that it wasn’t going to be a business where a solo entrepreneur could scale and be successful,” Grutt said. He also upgraded the company’s technology and computer system.
Once a week, Rick Lehrer and Art Grutt talk on the phone. For the most part, Grutt does not seek advice from Lehrer.
“I feel a bit left out,” says Lehrer. “When I was 41 and running my own business, I really didn’t want other people’s help. I understand it intellectually.
But Grutt says that through his calls with Lehrer, he gets more than advice. It is a reminder of a philosophy.
“That’s the passion Rick had for the business. It’s incredible energy and passion,” Grutt said. “It is something difficult to reproduce and yet it is essential to reproduce it when the next owner takes the reins.”
In Lehrer’s case, his two children were not interested in taking over his business, but baby boomers passing on their family businesses to their descendants face similar difficulties as Grutt and Lehrer.
Sarah Grossman joined her father’s company, BayState Business Brokers, 13 years ago, knowing that one day he would retire and she would take over. His only brother, a brother, was not interested in the business.
Five years ago, she and her father, Marc Gudema, hired a family business consultant to help them develop a succession plan. The consultant helped Gudema see the added value of Grossman and convinced Gudema that she should become a co-owner. Yet when it came time to retire, Gudema, 73, did not set a date. This caused some tension between father and daughter.
“We struggled for several years,” Grossman said. “I kind of knew the path I wanted, but he didn’t know when his release was going to be.”
When the pandemic hit, Grossman said Gudema stopped coming to the office because his age put him at high risk of contracting the virus. Months later, Gudema realized he wanted to retire and spend more time traveling and visiting family.
With less than two months’ notice, Gudema announced in November that he would retire at the end of 2021. Grossman, an heiress-in-waiting for years, found herself abruptly at the helm of BayState.
“At first I was nervous. We had 6 weeks to figure that out,” Grossman said. “But he had me set up to be successful and we had been working together for a long time.”
Even now, father and daughter disagree on the reasons for Gudema’s retirement.
“Was it covid? I don’t know, maybe,” Gudema said. “Admittedly, the timing seems coincidental.”
Gudema says retirement was imminent, pandemic or not. He wanted to travel in his RV with his wife and take long trips, and spend more time with his son and grandchildren in Florida. No matter where he is, he makes himself available to Grossman when she needs him.
“I know he’s always within phone range,” Grossman said.
And Gudema still takes on clients from time to time and works as a part-time employee for her daughter.