If ditching a regular job for meaningful work is part of your “retirement” plan, then it’s time to start taking the financial steps necessary to make that a reality.

Money is the biggest stumbling block when it comes to changing careers later in life. That’s because starting over in a new field, particularly a philanthropic one, or going the self-employment route usually comes with a price tag, at least initially. If you can start the planning process a few years ahead of time by saving, adding new skills and downsizing, you’ll have a leg-up.

I plan to. But I want to be able to pick and choose the work I do based on what’s important to me, and what I love to do, not solely the paycheck. And I definitely don’t want to take on a load of debt or raid my retirement funds to make that happen. And that takes some financial footwork.

I have spent the last several years interviewing successful mid-and-late career changers. I’ve followed their paths-not all have been smooth, but with a financial strategy in place before they hit the re-start button, they were prepared to wade through those tough times. Some decidedly unromantic dollars and cents decision-making is what gave them the chance to pursue a dream job. It gave them the safety net to choose

what they wanted to do next and bought them the time to ramp up the necessary skills.

These second-acters taught me some core lessons on how to do it right. Here’s a financial roadmap that works.

Sock away savings. Refrain from scooping funds from retirement accounts or sinking your mitts into home equity. The standard advice is to have an emergency fund of at least six months to a year of living expenses saved before you make the jump, but the more the merrier.

The reasoning here: You may need to carry your own health insurance costs for a time, pay for retraining and education. Your income may be lower than it was in your old job for a variety of reasons. If you’re starting your own business, you not only have launch costs, but it may take a few years before it turns a profit. Simply put, a savings cushion opens up options and lets you be patient when it comes to finding the right job for you for this stage of your life.

Chart a budget. The inevitable upfront costs of a career shift usually means you need to do some belt-tightening. I’m not a huge fan of budgets that make your life uncomfortable, but when you have a bead on what your cost of living really is–your debts, savings, monthly cash flow and all the fluff, you can see where the easy, and, perhaps not so easy cuts can come from. What can you do without, at least temporarily?

There are some obvious cuts that you hear all the time–dry cleaning, vacations, dinners out. One wayWell Read bookstore owner Bill Skees, 58, cut back his spending when he decided to switch from IT to open his own business in Hawthorne, NJ – he quit his one-pack a day smoking habit. That’s good for many reasons, of course. Are you willing to do that? (Continued on next page).

Get out of debt. If possible, pay off outstanding high-interest credit card debts, college loans, and auto loans. This can take some time, but starting a new venture with as clean a balance sheet as you can will make your life less stressful, particularly in the lean early days of your new venture.

Learn before you quit. Keep your current job while you add the education you need for your new pursuit. Many employers offer tax-free tuition assistance programs—up to $5,250, not counted as taxable income—and the contribution doesn’t have to be tagged to a full-degree program. You may have to repay the funds, though, if you don’t stay with the company for a certain number of years afterward.

Check-out lower tuition options. There are a host of certificate programs in specialized fields of study that you can cobble together one course at a time. A growing number of community colleges have 50-plus offerings aimed at adult students looking to retool their careers. Community college classes, too, are generally a fraction of the cost of a full-blown university degree and may be all you need to prime the pump.

Seek financial aid. You may qualify for a low-interest Stafford loan, currently a fixed rate of 6.8 percent. Many private lenders also offer loans, though rates will be higher.

Research scholarships and grants. These, too, are available for older students, and are offered by associations, colleges, religious groups, and foundations. The AARP Foundation, for instance, has a Women’s Scholarship Program for 50+ low-income women. Go to sites such as FinAid.org to find what’s available.

Take advantage of educational tax breaks.Depending on your income, you might qualify for the lifetime learning credit, worth up to $2,000 each year. There’s no limit to the number of years you can claim the credit. If you make too much, the income ceiling is higher for claiming a deduction associated with tuition and fees, up to $4,000.

There’s also a maximum student loan interest deduction of $2,500. For details, see IRS.gov. If you think you might go back to school in a few years, consider opening a 529 plan.

Downsize your housing costs. Think about moving to a smaller home, townhouse or condo. Depending on your real estate market, refinancing your mortgage can lighten your debt load. Move to a cheaper cost of living area where there are job opportunities for workers your age. Figure out how much you can save over time with an online refinancing calculator. Check HSH.comorBankrate.com for the latest rates and then shop around. You might even be able to write off moving expenses.

Set-up a self-employed retirement plan. If you’re starting a business, moving to a nonprofit or a small firm without an employee retirement plan, you should keep setting aside money as long as possible in tax-friendly accounts. Your three main options: a SEP-IRA, Solo 401(k), and a SIMPLE IRA. Read mycolumn “Best Retirement Plans for the Self-Employed” for more details.

Shop for health insurance. This one’s a bear if your next employer (maybe you) doesn’t offer a health insurance plan. Check out professional or alumni associations you belong to for group policies. You can compare a variety of insurance options in your area at healthcare.gov. Individual policies can be expensive, particularly if you’re 55 or older.

Other online sources to compare health insurance plans that are available in your area include:eHealthInsurance.coeinsurance.com, and GoHealthinsurance.com. The National Association of Health Underwriters website(www.nahu.org), can direct you to a local health insurance agent if you prefer to have someone else do your homework. Don’t drop your current employer’s insurance (you can continue it for a time under a law known as COBRA) until you have a new policy in hand. For more on health insurance plans, read this column.

Check for mistakes on your credit report. Everyone it seems wants to know how creditworthy you are these days from prospective employers to lenders, landlords and insurers. It apparently says something about your character, so shipshape pays. Visit www.annualcreditreport.com to request a free credit report from the three major consumer credit reporting agencies–Experian, Equifax and TransUnion. Clean up anything that’s wrong or looks questionable. This can take a little time.

Boost your credit score. To raise your score a few months before you start interviewing for a new job, renting office space or applying for a small business loan, lay low. Don’t sign up for any new accounts, transfer balances or close accounts. Closing accounts sounds like a good idea, I know, but it lowers your available credit and pushes your current ratio of debt higher. Your score changes constantly, but the oft repeated advice is – one thing that will help a shining score is always paying your bills on time. Makes sense to me. For more help, go to Credit.com.

Squeeze the most from job hunting tax breaks. Keep track of all your job hunting expenses. Uncle Sam lets you write off many job-hunting costs such as résumé  preparation, travel for interviews, outplacement fees, moving expenses, and professional association dues. If you’re heading off to the world of self-employment, ask your accountant about setting up a sole-proprietorship business reported on tax returns on Schedule C that allows additional deductible expenses. For more, read How Write off Your Job Hunt.

Final tip: A financial plan is a work in progress. Design a blueprint for your big career shift including what it might cost to get it rolling, then do one thing daily to work your plan–run the numbers on a mortgage refinancing calculator, order your credit report, or put the cashback from your rewards credit card into your Second Verse savings account straightaway. Step it up.

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