Question: I’m 64, retired, and want to invest $400,000 of my $2.4 million portfolio in a winery I’d co-own with a few partners. Am I crazy?

Answer: Many people look forward to retiring because it typically means a break from the daily grind of work. But there’s a downside to not working — having too much free time. If you’re starting to feel restless in retirement, you may be interested in starting a business — not necessarily for the money, but to have something meaningful to do with your time. And let’s be honest: Being a vintner sounds like a lot of fun.

If you’re 64 with $2.4 million, you may have enough money for a pretty comfortable lifestyle — especially if you have a nice Social Security check coming your way every month. But do you have enough to invest a good portion of your savings in a co-owned winery?

Clearly, there are some risks involved. Not only could taking $400,000 from your savings force you to change your broad withdrawal strategy, but you could conceivably lose all of that money if your business fails. You’ll need to do some due diligence, of course. Wine making is a tough industry these days, according to Silicon Valley Bank, with only 16% of vintners saying their business was “very strong” or “rock solid” in 2024. Some of the industry’s headwinds may be hard to shake, as younger generations are drinking less and U.S. wine consumption is declining due to health concerns.

That doesn’t mean investing in a winery is a poor choice, though.

Consider the benefits involved

While investing in a winery may be risky, Bruce Maginn, adviser at Solomon Financial, says there can be significant benefits.

“Co-owning a winery throughout retirement can have financial and personal benefits,” Maginn insists. “However, you’ll want to ensure the investment isn’t relied on for significant income.”

As Maginn explains, because the wine industry typically moves independently of traditional markets, any income your business generates could provide diversification for your portfolio.

More importantly than that, though, is the personal satisfaction you might get from owning and operating that business.

“Co-owning the winery can also give you a sense of purpose and fulfillment while enjoying retirement,” Maginn says. “It can help connect you to your community, create social engagement opportunities, and help keep you mentally active.”

Maginn also points out that a business like a winery “could be used as a way to create a legacy for your children and grandchildren.”

Recognize and mitigate the risks

There’s no such thing as a risk-free investment, and a winery falls into that category. The risk in this situation, says Maginn, isn’t just losing your $400,000 investment. Rather, you could face additional expenses that eat into your savings even more, such as litigation, partnership disputes, and operational surprises. If you’re going to open that winery, you’ll need to factor these potential costs into your decision.

For this reason, Maginn suggests financing the $400,000 rather than pulling the money from savings.

“If you can borrow at a low percentage rate,” he says, “then the long-term math will likely work in your favor. You will likely have earned more interest than you paid to the lender.”

Adam Spiegelman, founder and wealth adviser at Spiegelman Wealth Management, agrees that the risks of owning a private business can be substantial.

“A winery is not a brokerage account,” he says. “Once your money is in, it’s in. If your life changes, the market dries up, or you simply want out, it may be extremely difficult to get your capital back.”

For this reason, borrowing may be a better choice than tying up your own money.

Spiegelman also warns that even if you’re not relying on your business for retirement income, if it fails, it could have a huge impact on your life.

“If this goes poorly, it may affect mental health, family relationships, or retirement expectations,” he says. “Pride and ego often get wrapped up in passion projects more than people realize.”

All told, Spiegelman says, “Committing more than 5% [of a portfolio] to a single private winery would make most advisers nervous.” In this case, a $400,000 investment represents almost 17% of a $2.4 million portfolio, making it “a very large concentration in a very risky corner of the investment universe.”

Spiegelman says that in this situation, buying into the winery isn’t necessarily the wrong choice. But you do need to be honest with yourself and, if applicable, your spouse or family, about why you’re doing it.

“If someone loves wine, nature, hospitality, or simply needs a post-career purpose, a winery can provide structure, social connection, intellectual challenge, and a reason to get out of the house,” Spiegelman says. “But those positives don’t change the underlying risk.”

Spiegelman suggests framing the decision as a consumption choice rather than an investment.

“If you treat it like buying a vacation home or a boat — something that may enrich your life but probably won’t enrich your net worth — the math becomes more honest,” he says.

Maginn agrees.

“This opportunity could really enhance your retirement,” he insists. “If you approach the investment with a clear head, legal protection, and a partner who shares your vision, then it can be a rewarding experience.”

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