Ask the Captain: Artists and Retirement, Part Two
Thursday, August 14, 2014
Welcome to "Ask the Captain," a column about finances for theatre artists, where questions sent in by readers like you are answered by our fabulous financial whiz, the Captain! (The Captain's human alter ego is Tom Swift, playwright and do-gooder at Financial Avengers® in San Francisco.)
Send us your artist money questions here!
| The Captain (in hat) and his business partner, The Oracle. |
Photo: Keith Brauneis
Last month you answered my question about retirement plans for artists. Thanks! But it got me thinking...and now I'm freaking out.
I mean, retirement is kind of a foreign concept to me in the first place, because I love my work, so I can't imagine quitting. On the other hand, life is unpredictable and I don't want to end up living on cat food. And I keep seeing all these ominous billboard ads and "retirement calculators" telling me I need to somehow stash away millions and millions of dollars so I don't starve. But I'm an artist in the Bay Area, so saving their "recommended" $500 per month just isn't going to happen, even though I'm frugal as fruck. Am I screwed?
I'm okay knowing I'll never be able to buy a home in the Bay Area, but how can I at least be not desperately poor when I'm old? And what about health care costs? The more I think about all this, the more it seems like a bad production of A Dream Play I saw back in community college.
As I said, I'm freaking out! HELP!
- Freaked-out, Frank and Frugal-as-Fruck
First off, stop thinking so much. Anything that recalls Strindberg is unhealthy.
Second, is this the kind of advertisement you mean?:
INT. KITCHEN - NIGHT. A middle-aged couple, HUSBAND and WIFE, sits at a kitchen table reviewing their finances. Behind them a fireplace blazes. The actors' eyes flash with subtle fear, as menacing MUSIC creeps in like a snake.
Have you saved enough? As your father lingers in a sordid rest home, and mom suffers in a converted closet in your basement, do you think…
That could happen to us.
But…we've saved, haven't we?
My parents saved and now—look at them.
(Cut to DAD in a diaper and MOM playing tiddlywinks in her closet.)
But they were terrible with money.
Don't attack my parents-
At least my parents died young.
They didn't even have life insurance—we could have been set for life!
How dare you defile their memory-
I just want to know whether we can retire-
I just want your mother out of our house!
[Cut to MOM in the closet, terrified.]
[Cut back to HUSBAND and WIFE.]
She's family, you son of a bitch –
[They attack each other, rolling on the floor.]
Did you know that the average American family will need $4.5 million dollars to retire comfortably?
[HUSBAND and WIFE stop fighting.]
HUSBAND and WIFE
You're frucking kidding me.
Something like that. Maybe more. Who knows?
[Pause. Then HUSBAND and WIFE throw themselves into the fireplace, screaming in agony.]
If you're worried about retirement, call Ameri-Prude-Fideli-Prise-Financial today. We can quell your panic, even if we can't achieve your dreams.
(Quickly) Results may vary, depending on financial circumstances. Self-immolation likely, due to sub-par investment results. Fees will be excessive and will impair long-term returns. Retirement projections are imaginary and have no basis in fact.
(Happily) Get started today!
[Agonizing screams from HUSBAND and WIFE in fireplace. Fade to black.]
END OF COMMERCIAL
So, FoFaFaF...where do we begin?
The secret you seek, FoFaFaF, is in your question. You describe yourself as "Frugal as Fruck"—and that's the key to your retirement.
Here's what we've found, and it flies in the face of every commercial and online retirement calculator you can find: If you consistently spend less than you earn, and if you consistently save at least some of what you earn, you will have enough to retire. Period.
Can't save $500/month? Don't sweat it! Save $50. Can't save $50? Save $5. Remember this, and pound it into your consciousness: It is the act of saving that counts, not the amount.
Seriously, if you keep that up, and never stop, by the time you get to retirement you will have enough financial discipline (and savings) to make it work. Along the way, as you experience more success in your professional life, you will earn more. As you earn more, you will save more. And that is all you need to know.
Don't think about buying a home in the Bay Area.* It will just depress you, which will make you stop saving, which means that neither retirement nor home ownership will ever occur. Seriously—stop it. Focus on one step at a time. The first step? Saving.
*Home ownership is not impossible in the Bay Area, but we'll cover that in a future column.
Also, don't think about health care costs in the future. No matter how much Republicans want to destroy Medicare, they aren't going to do it. You'll be covered when the time comes, and the long-term costs of Medicare will eventually be addressed. And anyway, it's not something you can control. But you can control what you save. So, keep saving.
Are you sensing a trend here, FoFaFaF?
Finally, as an artist, how you retire is not going to be how the rest of the country retires. Retirement for you is going to have its own meaning, and may include working, for decades—not because you have to, but because you want to. And that's great! Our generation is rewriting the rules of retirement. (It's about time someone did.) We have lots of artists as clients, and they don't have anything close to what our industry says they should have. But, they have enough, and they also have damned good lives.
Here's the problem, FoFaFaF. You've been listening to my industry for too long. And my industry thrives on creating fear and dependency, because fear and dependency makes us lots of money. Ignore it. All of it.
Focus on only one thing: saving.
Save what you can, when you can, for as long as you can. Be economically cautious, but artistically daring. Enjoy life like it's gonna end tomorrow, but keep planning to live it for a very long time. Have a beer or a buffet, but after you do, put a few bucks into savings, and keep it there. After thirty to forty years, it won't matter how much you have saved. What will matter is that you have saved.
That really is all there is to it. You can do this, FoFaFaF.
And thanks for asking this question. There are some days I think it's the only one that matters.
P.S. Social Security will survive, too. And I haven't even mentioned pension benefits offered by certain artistic unions. These could have profound impact on your retirement, should you be a proud union member. But whether you're a union member or not, start saving. Today.
P.P.S. Also, avoid too much debt, particularly credit card debt, pay off your student loans, and remember this is a frucking marathon, not a sprint. Rule Number Ten of the Financial Avengers® is this: Breathe. So, keep breathing. And, keep saving. And, try to avoid Strindberg at all costs. He's just so damned depressing.