ent. Health insurance. A new computer. For most writers, as soon as a check comes in, the money is on its way back out again. With the notoriously variable income that goes along with writing, it can seem impossible to put away money for retirement. It's not that writers don't want to be able to eventually retire, but without an employer taking care of all the paperwork, planning for retirement isn't easy. It isn't impossible, though: while writers must take responsibility for their own retirement, there are tools and resources to help.

THE FIRST STEP: TAKE RESPONSIBILITY

Nora Dunn makes her living as a freelance writer, traveling around the world. Before she embarked on her adventures, however, she was a certified financial planner. She's used her own skills to help her plan for retirement: "Before I started freelancing, I was a blissful participant in company retirement plans, taking full advantage of matching contributions and pension schemes. Once I moved out into the world of freelancing though, I had to take on retirement planning as my own. It became immediately important to set up contributions to my individual retirement plans, but with a constantly changing income, it has been a struggle to make the contributions automatic, which is my preference. It is a constant and conscious effort to save for retirement; maintaining the discipline to earmark a percentage of every paycheck for investments is a priority."

Even if you don't come from a financial planning background, Nora's point rings true. When you have a steady paycheck every week, it's a simple matter to set up an automatic payment to a 401(k) plan. But writers don't often have a good idea of just how much will be coming in to their bank account from week to week. That makes taking personal responsibility—down to transferring money to your retirement account by hand if you have to—an absolute necessity. Once you recognize the fact that no one will take responsibility for your retirement except for you, you can get comfortable with the fact that you can create an effective retirement plan without a steady paycheck.

“...as a writer, you can be more flexible about how you plan your retirement than someone with a salary might be.”

GET YOUR FINANCES IN ORDER

Before you can go shopping for retirement plans, it's important to have an idea of your finances overall. You'll need to ask yourself a few questions—and if you can't decide on the answers, you may need to take a closer look at how you're managing your finances. How much do you think you can set aside for your retirement without changing your current spending? How does that differ between your best and worst months? Where can you change your spending to increase how much you're able to save? These are questions that any financial planner is going to ask you, and knowing the answers ahead of time can help you seek better information as you move forward.

Setting goals for your retirement is also important. If you think you'll need your full annual income to support yourself during retirement, for instance, you'll have a very different plan for your retirement than if you think that you can live comfortably on 70 percent of your current income. Tools like Bankrate's retirement planning calculator can give you an idea of how the numbers breakdown when you change different variables related to your retirement planning.

It's important to remember that as a writer, you can be more flexible about how you plan your retirement than someone with a salary might be. Rob Jupille works primarily with freelancers. He notes, "Savings may not be done on a regular basis, but a quarterly or year-end goal can most likely be achieved." It can be a good idea to speak with a financial planner, like Rob, once you've got an idea of your retirement goals.

“Do not—ever—cash in or borrow from your retirement plans to pad the leaner months...”

FINDING THE RIGHT FINANCIAL PLANNER

There are two types of financial planners: fee-only planners who earn their fees for the work they do for you, and planners who earn their money based on commissions from the financial products they sell. No matter what approach you take to your retirement planning, you should limit your search for a financial planner to fee-only planners. There are a number of different designations for financial planners, of which Certified Financial Planner is just one. However, the CFP designation is among the most common and requires knowledge of a variety of financial topics that affect writers, including retirement and insurance planning. Those skills make a CFP an ideal resource to help you with retirement planning.

Finding a financial planner you're comfortable working with is crucial. Rob suggests, "The best place to find a qualified financial planner is to get referrals from other freelancers that may have already utilized their services. Barring that, organizations such as the National Association of Personal Financial Advisors (NAPFA) can give you a referral to a fee-only financial planner." As a writer, a financial planner who works primarily with freelancers or small businesses is likely to be best able to help you with your retirement planning.

Among the services a typical financial planner will offer you is a more in-depth discussion of your current financial situation and your goals for retirement. He or she will also be able to walk you through the many different retirement plans available to you—the wide variety of differences between personal pension plans, insurance-based retirement savings plans, SIMPLE IRAs, SEP IRAs, Roth IRAs, and even individual 401(k) plans make a little guidance very helpful. A financial planner can also discuss the problems you may encounter when working with your retirement plan. Nora pointed out an example of a particularly dangerous problem: it's become fairly routine for some people to use their retirement accounts as an emergency fund, which can start a domino effect of problems throughout your finances. Nora says, "Do not—ever—cash in or borrow from your retirement plans to pad the leaner months, as the subsequent tax hit will sink you further into a financial crisis which becomes a downward spiral that is hard to break." A good financial planner will point out similar areas of concern, as well as alternatives like instead building a buffer or emergency savings a priority in your budgeting, allowing you a cushion to make it easier to avoid tapping your retirement account.

Because there are so many variations in how writers earn, spend, and save their money, there isn't a perfect retirement plan that works for all writers. Those differences make it worth the cost of consulting a financial planner personally, in order to make sure that you get the right advice for your own situation. Financial planners, as a rule, don't have a standard approach to retirement planning. Instead, they take a look at your specific situation in order to suggest options that work with your individual circumstances. It's possible that you may decide to move on to another career other than writing at some point down the road. A financial planner can take that eventuality into account and help you with a plan that will be useful no matter your long-term career plans.

“The earlier you start saving means the more you'll wind up with at retirement: it all comes down to a question of compound interest.”

MANAGING YOUR RETIREMENT IN THE LONG-TERM

Now may seem like a strange time to discuss retirement. After all, many people are in financial situations where just paying the bills is hard. The idea of putting money into savings right now may seem out of reach. But, talking about retirement planning is just as important in a down economy as it is when everything is going well. The earlier you start saving means the more you'll wind up with at retirement: it all comes down to a question of compound interest. Even if you're only able to contribute a few dollars to your retirement savings now—compared to a significantly larger contribution in the future—you can wind up ahead even if you only make those smaller contributions now. Not sure? Run the numbers yourself on a compound interest calculator.

When you take into account the variable nature of a writer's income, it becomes even more important to work on your retirement planning now. The more time you have between you and retirement, the more time you have to accommodate the natural hills and valleys of your income. You'll have more opportunity to put money away during good seasons and more room for comfort during lean seasons. Retirement planning is a long-term project, and you'll be better equipped to manage it the earlier you start.

As a writer, you can afford to be a little more flexible about your retirement planning—as long as you do have a retirement plan in place. Writing is a career you can stick with after the official age of retirement, offering you a bit of a cushion when planning how much money you need to retire comfortably, and when you need to have it by. That alone can make the question of how to retire on a variable income much simpler. You still need to plan ahead, though: it's time to start thinking about your retirement goals and how you intend to reach them.

Thursday Bram is a freelance journalist with over five years experience. Her work has focused primarily on small business topics as she tries to make life easier for entrepreneurs.

More information about Thursday is available at www.thursdaybram.com.

For more money matters, read Thursday’s article How 2 Manage Your Freelance Invoices.