I just got the paperwork back on the Limited Liability Company (LLC) I am setting up. I’ll admit I don’t really know what I am doing, but I’m hopeful that it will be a useful structure to operate some limited, freelance, business activities in early retirement. It’s also a signal to myself that I’m getting serious about actually leaving MegaCorp next April 1st.
My thought was that it would be good to have a business structure to allow me to make money as an independent contractor if the opportunities presented themselves in early retirement. I recently signed on for a three year term to be an outside director for the board of a manufacturing company, and while it is only a handful of work days over the course of the year, there is some income & expenses involved with the role. Why not be prepared for other (limited) consulting roles that people may approach me with?
Additionally, I’ve been thinking about other hobbies that I might be interested in developing into small “nano businesses”. I’ve always thought it would be cool to have a few small business operations that monetize an area that is a personal passion. I’ve also been reading a bit about real estate investments and understand that you wouldn’t want to own rental properties in your own name for liability reasons. Having an LLC up and running might be useful in structuring all kinds of hobby ventures that could be entertaining (and produce some extra fun money).
Finally, I am guessing there are some tax benefits to an LLC in terms of the way they are structured. I don’t really understand all of that at this point, but I figured it was worth the $400 to LegalZoom.com to get me up and running.
We’ll see where it goes. For now, I’m learning about the paperwork, tax choices, and operation of the LLC. It’s a bit of an education for a guy who’s worked at MegaCorp his whole career, but good fun. It’s neat to see your name and new company name officially printed on articles of incorporation & paperwork from the state’s Secretary of State.
With just over 7 months to go before my FIRE escape date from the corporate world, the LLC is also one significant step toward my post-MegaCorp life. No longer will I be directly associated/linked with the big companies I have worked for – something I have gotten used to. In some ways, the LLC will be my new image and something I will likely talk about when people ask me what I’m doing. While you shouldn’t worry about what others think, saying you are “retired” at 50 seems a bit odd to me (“you’re not going to do anything?” I’ve already heard too often). Instead, I can simply say that I’ve started a small consulting company, but have dialed back my hours from when I was at MegaCorp.
So in that sense, my LLC is both an opportunity to “play” in the business world and a “cover” to play hooky from a traditional work until at least 60 years old expectation that many still subscribe to.
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4 thoughts on “Starting an LLC for Early Retirement”
As I’ve become more vocal about my plans to escape from BigLaw, I’m getting the same perplexed inquiries. I’ve started telling people I am retiring from the legal profession and from there, who knows? Work as Play. I like the sound of that.
“work as play “– I like the sound of that! (and not too many hours)
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Keep us posted on the LLC process, and how it goes after you quit next spring. We hadn’t thought about that for post-retirement income (we’re still a few years away), but it sounds like it could make a lot of sense!
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