Although the saying goes, “Pursue your passion and the money will follow,” plenty of people know that you can love what you do and still have a lot of month left over at the end of the paycheck.
So how do you save and plan for retirement while also doing low-paying work that you love? Bankrate.com asked people who’ve been successful to share their secrets.
The Bankrate Daily
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Do the math
Psychologist Katie McCorkle says, “While my profession is not necessarily low-paying, it has been a constant balancing act to generate enough income to keep my bills paid — and still have enough time and energy to do all that’s been required to launch Balanced Heart Healing Center, the 501(c)(3) nonprofit integrative healing center I founded. It would have been so much easier if I could have trained my four cats to help generate income!”
While McCorkle plans to work through retirement — she says, “Pursuing my passion is my retirement” — she also knows she needs money in the bank. She accomplishes this by transferring a predetermined amount of retirement money to savings before doing anything else with her paycheck. “You begin to train your brain to think of your income as the amount you have left after taking out your retirement savings, and you adjust your lifestyle to that amount. Commitment and consistency is the key to making this work.”
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Save before you leap
When Mark Meritt’s daughter was born in 2003, he and his wife wanted to work less and spend more time with their daughter. But before Meritt left his job to become self-employed, he and his wife built up their savings and 401(k) investments, “to ease the initial burden while transitioning to this more satisfying life.”
The secret to saving for retirement even when your work is low-paying is to make sure you prioritize your retirement savings, says Meritt, “even if it means being more frugal with other things.”
Ongoing general frugality, as Meritt calls it, has served his family well. During the years they were earning more, saving money before they transitioned to their new life involved diligent savings and frugality. “That set the groundwork for our current situation and made it possible,” he says.
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Work on the side
When Sue Fliess had her first child seven years ago, she left a lucrative marketing position at a startup to stay home with her son. Like many women, she always thought she’d return to a staff position, even if only part time. Then she realized that, with her husband’s support, she could pursue her longtime dream of becoming a writer.
“It took three years, but I sold my first children’s book — and then two more. I now write full time (well, as full time as I can with a 5- and 7-year-old in the house).”
Still, Fleiss makes nowhere near the money from book sales that she made in her marketing position. That’s why, in addition to writing children’s books, she also freelances on the side. Taking on that extra work helps defray expenses for her family and enables her to save for retirement.
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Do with less
Candy Lindsey spent most of her life as a school teacher in a small Missouri school district — not a high-paying position by anyone’s standard. Still, Lindsey was able to do the work she loved by simply living frugally throughout her life. She was able to retire two years ago, at age 60, and lives in a condo with her mortgage and car completely paid off. She continues to work part time to help pay the bills.
She is able to access excellent medical coverage through her previous employer, which she feels is a key element of her successful retirement. Beyond that, she says, “I guess I just live frugally. My daughter, who is 40, has always taken care of herself — she doesn’t need financial assistance from her mother. I belong to a club where I swim many times a week. I usher at university sporting events and cultural events, so I get lots of entertainment for free. I mostly cook at home. I walk the beautiful trails in our town three times a week with a friend. My life is wonderful.”
Living within your means is key. “Spend money on maintaining relationships,” she says. “Buy less stuff. All that happens is that you need to clean it, move it, manage it, insure it.”
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Why retire when you love what you do?
Tara Dillard likes to point out she’s “a self-employed garden designer in the worst economy since the Depression, and I’m working!” She lives passionately for gardening — but that doesn’t mean she neglects saving for retirement. She simply focuses on the basics there: “It’s not rocket science,” she says, referring to stashing money in her Roth IRA.
“Somehow the sacred-profane thing does work,” she says. “You know, the corny ‘Build it and they will come’ theory from ‘Field of Dreams’ with Kevin Costner.” She goes on to explain: “Retirement is more than money, it’s choosing how to live. I choose not to retire. I love what I do.”
She says her father, a NASA engineer (age 76), still works full time for NASA. “Perhaps that’s part of my retirement attitude, too. The right stuff, played forward.”
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Make your dreams possible, and save for retirement at the same time. Check out these retirement resources from Bankrate.com.