4 Things Every Bartender Should Do to Plan for Retirement

It’s now common knowledge that you can indeed make a rewarding career out of bartending. With so many different avenues to explore, from brand ambassadorship to bar ownership and product entrepreneurship, many bartenders are now looking down the road 10, 20 years and asking: How can I better prepare for my future?

After all, planning for retirement isn’t easy for anyone these days, but it’s even more difficult when you have limited access to HR resources, matching 401(k)s and other benefits widely available in other industries.

To get you started, we’ve tapped John Garda and Jason Littrell of Shift Owner, a company that aims to “help hospitality workers gain financial freedom beyond the tip pool.” These veteran bartenders share how they’ve navigated the tricky path to retirement and what advice they’d offer to those just breaking into the industry.

1. Know How Much You Make, and Make a Budget

Without a set annual salary to work off of, you’ll need to take matters into your own hands and start tracking how much you earn after every shift. This includes your cash tips, which should always be accounted for. “This will help you when it comes time to calculate things like your average hourly rate and average monthly income but also to forecast expected earnings in the future,” says Garda.

Once you know how much you make, on average, you’ll need to match that up with how much you spend—and be disciplined about it. “It’s important to know where your money goes, and there are several free easy-to-use apps to help you manage and track your income and expenses,” says Garda. Try apps like Mint, Spendee and YNAB, which automatically track incoming and outgoing funds in a clear easy-to-read format.

2. Protect Your Ability to Earn by Taking Care of Yourself and Your Headspace

With grueling hours, high-stress environments and easy access to booze, the bar world is filled with risks as well as rewards. Take a common-sense approach to your physical and mental health but also invest in insurance and seek help when needed. “Life is filled with unexpected events, which is why insurance was created,” says Garda. “Health, renters and pet insurance are probably the highest priority when it comes to ensuring piece of mind and the ability to keep earning in the face of disaster.”

On a personal level, you can get involved with movements like Earn Your Booze, started by fitness-minded bartenders, and also watch your diet. (Yes, we’ve all scarfed down a slice of pizza between rounds, but that shouldn’t be the norm.) And lastly, mind the booze.

3. Turn Your Savings on Autopilot

Set up a program that automatically sets money aside and into a savings account, and then pretend it’s not there. “Starting this will eliminate the need to add to another account manually and will also put that money in a different less-used space, free from late-night Amazon binges,” says Garda. “The goal should be to accrue at least three months of expenses in a savings account—again, to protect you from the unexpected.”

4. Invest Sooner Rather Than Later

“With as little as $5, you can start investing using online investing tools,” says Garda. “If your employer doesn’t have a 401(k), it can be a great idea to look into an IRA. Other investments like stocks, ETFs and whole life insurance all offer value with different caveats.” While investing is highly personal, and dependent upon personal goals, any investment benefits from the advantage of time. Do your homework to find the investment option that works best for you, but regardless of what that is, start now. “Set aside a little bit every week, and forget about it—let compounding interest do the work,” says Littrell.

For those looking into an IRA for the first time, consider a Roth IRA, which only allows you to contribute post-tax income. The benefit here is that you can contribute up to a couple thousand a year while still in a lower tax bracket, and when you want to take money out in the future, you won’t have to pay a higher tax rate on the entire balance. Then again, if you plan on opening your own business, an IRA might not be the right decision for keeping your cash liquid.

“We’ve found that the biggest barrier to entry is that people think they need a lot of money to get started,” says Littrell. “New services like Acorns, Stash, etc., are democratizing financial planning, and this is changing the financial landscape for folks like us who don’t often have options available through our employers. We’re trying to send the message that financial empowerment and independence is attainable to the average shift worker.”