Writing Online for Retirement

Saving for Retirement 101

Every financial advisor and online money article drives home the need to start saving for retirement early and stay consistent. It doesn't matter whether you are saving up in your employer's 401k retirement plan, or if you are saving in an IRA, those early dollars saved in a pre-tax environment really do add up toward those Golden years. Plus, with all the uncertainty over whether Social Security will be around for younger workers when retirement time rolls around, it's even more important for them to sock it away from working day number one. And if you are a writer earning performance income or royalties, you have another possible income stream: recurring income.

There are many online calculators that will help you get a picture of much money you'll have at retirement. Here are my favorites:

Try MSN Money's Retirement Planner, CNN Money's Retirement Planner or John Hancock's Retirement Calculator.

Use Your 9 to 5 Knowledge to Your Advantage in Planning for Retirement

If you are working in a traditional job right now, take a look at what you are learning on the job and how this might translate into long-term writing income. If you are a nurse, you could write about health issues. If you work in a botanical field, you can write about plants and trees and how to make them prosper in your region. If you are a teacher, you can give parents ideas for helping their children learn at home too. If you are a bartender, you can share drink recipes and funny stories!

Recurring Income for Writers

In my opinion, the best kind of income is the kind you don't have to work for. What I mean is the kind that doesn't require that everyday, 9 to 5, punch-in, punch-out routine. When you are paid by the hour, you must work that hour.

There are many types of artistic endeavors that earn recurring money for their artistic contributors. This income pays them during their contributing years, and may last well after they have put in those hours of labor.

Songwriters earn continuing income on the songs they have written, as long as those songs are used anywhere in the world. Every time you hear a Beatles song on the radio or television, you can imagine their financial empires creating one more huge cha-ching! Their heirs will make money on all their songs for years to come! Authors earn royalties on the sales of their books, with best sellers staying on the bookstores shelves for years. And online writers earn performance royalties on their articles and stories which are, once published, like faucets with income flowing in well after they are written.

Plan for the Long Term When Writing Online

Sometimes writing, whatever the genre, may seem futile since the income stream can feel more like a slow, thin trickle, especially in the beginning. For writing online specifically, it takes time to build up a library of work that is earning enough to call an income. But there is a different way to look at this.

First of all, if the writer has maintained their right to their work, they can publish that online article or story more than once. If they are writing for one writing magazine, and find another one that their writing will fit into, they can republish their work again there.

Secondly, their writing income has a potential to be forever. If a writer builds a body of work that is primarily "evergreen", and augments the evergreen work regularly with articles that have a current edge, they have created an income stream that could easily continue once they consider themselves "retired" from the 9 to 5 grind.

Translation of Writing Income into Retirement Income

Let's look at your writing income from a different perspective. Let's assume you have a $500 writing income today. Ask yourself :

How much lifetime income would result in social security benefits that would equal that $500 writing income? or How much savings would earn the same $500 income stream?

$500 Social Security income:

Based on today's guidelines, you would need to earn between $18,000 and $20,000 annually from age 25 to 60, to receive a monthly $500 Social Security check starting at age 62. (To calculate what your Social Security benefits might be at retirement, use their calculator.)

$500 Annuity income for life:

For $500 lifetime monthly income, you'd need to buy a $100,000 income annuity at age 60.To do your own math, you can use the Immediate Annuities.com calculator.

$500 interestt on a Bank Certificate of Deposit:

To earn $500 in interest on a bank's Certificate of Deposit, you'd need to earn 5% on a $100,000 CD. That's a tall order!

One final thought on this. What if you started writing at 30 and socked away just $100 of your writing income each month for 30 years in a savings account earning 3%? Well, that would provide almost $60,000 at age 60 to put toward your retirement! (Run your own numbers at Bankrate.com.)

In summary, think of your online writing as a lifetime income stream, rather than in terms of just this month's page view payment. If you are working for someone else and earning an income too, save as much as you can toward your retirement in your 401K, AND use what you are learning from that job to write articles online that contain information that others will be looking for.

When you write, write about what you know, with a long term perspective in mind, and maintain your rights to your body of work. And finally, when it comes retirement time, savor that recurring writing income for what it is, equivalent to money earning interest in the bank!

Related reading:
How Much Money Can Online Writers Make?
Writing Online 101
Checklist for Writing Online Articles