Retirement

[AJ Young]

I'm curious to hear what everyone's plans and experiences are when it comes to planning for retirement in the film industry.

• How common are Traditional and Roth IRA's?
• What retirement does IATSE provide?
• What can freelance DP's expect with Social Security?
• What is the average age of retirement for DP's? Do they ever truly retire?

Hopefully we can hear perspectives from the full spectrum; those who are nearing retirement, those mid-way to retirement, and those just beginning in the industry.

 

------

 

To get things started, I'll share my experiences.

 

I currently have a Traditional IRA that was originally a 401k with the movie theatre company I worked at as a projectionist. Currently, I'm a freelance DP in LA. I won't say I'm exactly raking in the income, but I'm definitely staying a float with my primary source of income from cinematography. That being said, I annually make contributions to my IRA.

 

My plan is to keep saving into my IRA and retire around 68 or 70 years. Of course, I hope to live past 80, but I'd rather assume the worst and figure it out from there.

 

I do intend, current political climate excluded, to draw from US Social Security upon retirement age. However, I want to play it safe by eventually contributing the maximum annual amount to my IRA. Of course, that's close to 40 years away from me, so I need to manage my expectations during the coming decades.

[David Mullen ASC]

IRA, Roth IRA, index fund, money market fund, I think something called a Retirement 2030 fund (75% stocks, 25% bonds), union pension, and we own our house, no mortgage.

 

IATSE has a pension and healthcare plan for retired workers, but the amount you get out depends on how many years you have been in the union -- I only joined in 2003.

 

Trouble with planning on retiring as late as possible is you never know if your health will allow it. And often for cinematographers, at some point, you just stop getting hired even if you are well enough to keep working into your senior years, the industry passes you up unless you are just so famous that you never go out of demand.

[Guest]

unless you are just so famous that you never go out of demand.

 

 

That will be you David, we'll be wheeling you out of the retirement home at 93. :)

 

R,

[Gregory Irwin]

 

IATSE has a pension and healthcare plan for retired workers, but the amount you get out depends on how many years you have been in the union -- I only joined in 2003.

In addition to the pension and healthcare (which is excellent in my opinion) the IATSE also has the Individual Account Plan (IAP) that works similar as an IRA. Only the producers fund your IAP per every hour you work. That money is invested on your behalf with compound interest. This means when you retire after several years of service, your IAP money, that is yours, could be worth several hundred thousand dollars depending on the number of years. We receive statements twice a year showing your IAP's value. That's a very helpful retirement aid in addition to your pension and private investments.

[Bruce Greene]

about IRAs: Do you own a house yet(planning to buy one)? Have kids to put through college? If so, you may want to make sure you accumulate savings outside an IRA so that they are available for these investments.

 

And, having lived long enough... Buy your house when prices are depressed. Buying at the top of the market means that it will probably not be an effective investment. Housing prices don't always go up, even if the real estate industry wants you to think so. I bought a house in 1989. By 1994 the price had dropped by 45%! My next door neighbor bought his for almost 1/2 of what I paid. Lesson learned too late :)

 

Also, I only have one child. If I had had 5, I'd have a better chance of them supporting me in my retirement! (sort of joking, but not entirely!)

[David Mullen ASC]

Buying a house as a form of investment is a bit of a crap shoot, it's very hard to predict market values. You're better off buying a house because you want to live there for a long time and just hope that it rises in value, that's more of a bonus.

[Ian Takahashi SOC]

So many great points brought up so far, so I’ll expand on them and try not to repeat.

1). Make sure your high interest debt is paid. If you have a Credit Card Balance of 25% don’t make an investment that pays 5%.

2) Personally:

- IRAs (maxed each year for myself and wife)

- Roth-IRAs before I went Traditional (now sitting with REITs since they are taxed differently and I like their high-distributions to be in a tax-free account). I also trade options through this account since No Taxes.

- SEP-IRA (though an LLC) which my company can add up to 25% of my salary directly into.

- 401k max contributions (through my wife)

- Roth-IRA for my son

- Individual Brokerage accounts

mix of stocks, bonds, REITS, ETFs picked by me after hours and hours of research, I suggest that anyone who wants to passively invest (which I suggest) build a diversified portfolio using low-cost index funds, having dividends reinvest, then sleep well at night. When the markets drop, I buy more.

- LLCs with private businesses and a loan-out for most of my work, to control my tax payments ( when & how much etc vs. letting payroll companies attempt to get it right). One time they had me pay over 52% in taxes, when my effective tax rate is much lower...they wouldn't fix it, so it was an interest-free loan to the government till I filed my taxes.

3) Homes, see Mr. Greene, and Mr. Mullen, ASC above.

4) Keep your expenses low, and save your money. This is a crazy and fickle industry, even if you are out there hauling it in, I think it’s best to save and invest it. I’ll buy that fancy car when my dividends cover all my expenses, and the kids college is paid for.

5). I think (and have brought this up, and will continue to pitch this idea) that it would be a benefit to the IA600 members (probably all IA members) to hold ‘classes’ in basic finance, retirement, investing. A Union filled with people who are more financially stable, secure, and self sufficient makes us STRONGER in every aspect.

Edited January 29, 2017 by ian takahashi

[AJ Young]

Very interesting. Thank you for sharing, everyone!

 

Being a non-union DP, are there any seminars, courses, or general education a freelancer can take to learn more about the different retirement strategies you all have mentioned?

[Robin R Probyn]

I wouldn't put all your faith into pension funds.. they are good if your employer is also forced to contribute .. but they are mostly invested in the stock market .. and by law..(in the UK anyway) bonds & gov bonds).. erroneously and ironically seen as save bet ! these days both are very questionable places to have all your tin.. and not so long ago the whole tent almost came down.. (The Big Short).. and inflation can wipe out the whole lot too.. we live in a fiat (faith) currency world since Nixon..temporally ! took the Us dollar off the gold standard (to pay for the Vietnam war ).. in 1971..

 

Pretty much the only asset without 3rd party risk are bars of gold .. if you hold it yourself.. and dont tell anyone !

 

I own my own house .. not really as an investment .. but because I like the building,and the location .. and my family has to live somewhere anyway.. and i dont want to pay rent for 30 years either.. or be told i have to leave because the owner is selling.. I hope I can sell it for at least what i paid .. then I lived rent free with more security .. I have 3 daughters .. noisy and expensive and I very much doubt will pay for my dotage ..

Edited January 30, 2017 by Robin R Probyn

[Mark Kenfield]

Personally, I'm focussing on working out a lot, keeping my figure tight and my hair nice, practising my cooking skills. Mostly just hoping I can marry well - the trophy husband route seems my only real chance of long-term financial stability in this business.

[David Mullen ASC]

Personally, I'm focussing on working out a lot, keeping my figure tight and my hair nice, practising my cooking skills. Mostly just hoping I can marry well - the trophy husband route seems my only real chance of long-term financial stability in this business.

 

 

You figured it out correctly!

[Michael LaVoie]

I'd focus more on surviving the future rather than saving for it. With the way things are going, retirement is going to look a lot like this:

[Ian Takahashi SOC]

Very interesting. Thank you for sharing, everyone!

 

Being a non-union DP, are there any seminars, courses, or general education a freelancer can take to learn more about the different retirement strategies you all have mentioned?

 

 

Not that I know of specifically for this industry, but there are plenty of books and information out there. (Just don't buy the 'get rich on stocks' or 'Jim Cramers picks' styled books...

 

http://www.investopedia.com

 

Use it for looking up terms you may not know, or researching concepts. They also have great videos:

 

http://www.investopedia.com/terms/v/valueinvesting.asp

 

 

Spending a few hours here reading and watching anything related to Retirement, you'll get a decent overview and hopefully it puts you in the right direction.

 

 

---side note, you'll need money to put away, so as much as it's important to plan for the future, putting the work into your career is probably the priority...

[Robin R Probyn]

Personally, I'm focussing on working out a lot, keeping my figure tight and my hair nice, practising my cooking skills. Mostly just hoping I can marry well - the trophy husband route seems my only real chance of long-term financial stability in this business.

 

 

I had the same plan back in the day.. don't bet the farm on it though.. doesn't always work out..! .. daughters of the rich just cost more .. and their dads tie up all the money tighter than a witches crotch..

[Dan Hasson]

John Seale is a great example of a retired cinematographer... Just go out and shoot the new Mad Max!

[Robin R Probyn]

And then go sailing.. !

[Phil Rhodes]

Just for a bit of international perspective, I was at a union meeting the other day, and of 18 people present, a quiet canvas revealed that slightly more than two thirds were over 35 and had no retirement provision whatsoever.

 

That's what you get when the country is going terminally down the tubes and nobody can make any money.

 

This included people who work on high end stuff. I was astonished and horrified.

 

P

[Aapo Lettinen]

I don't have any personal retirement funds yet, just the basic crappy (mandatory) national retirement fund which all working Finnish people have.

 

With today's political climate and future political development, climate change etc. I don't personally think that most of the human race will survive the next about 35 years or so after which I will retire...

And with the constant worsening of the healthcare system etc. it is quite unlikely that I will live past about 70 or so...

I think the best retirement plan for me would be to purchase some good apartments and rent them out, then live with the rental income. and my children would have those apartments after I die so that the money would not go to waste if I die prematurely which is highly likely with the current political development I think :unsure:

[Mark Kenfield]

Just for a bit of international perspective, I was at a union meeting the other day, and of 18 people present, a quiet canvas revealed that slightly more than two thirds were over 35 and had no retirement provision whatsoever.

 

That's what you get when the country is going terminally down the tubes and nobody can make any money.

 

This included people who work on high end stuff. I was astonished and horrified.

 

P

 

If it makes you feel any better Phil, a Production Manager friend of mine in Canada says that apparently the average age of death in the Canadian film industry is just 55 years of age. If we can assume a comparable sort of statistic for those of us in similar western countries, then all this talk of retirement is really just a waste of time for most of us anyway! :)

[John E Clark]

I don't work in the film industry, but have worked mostly in startups or small companies that did not have 'pension plans'... so my 'plan' is US Social Security and poverty.

 

As it is the company I've been working for, we have been developing a new radio, and that is our collective great white hope, and those ever popular stock options.

[Guest]

I don't have any personal retirement funds yet, just the basic crappy (mandatory) national retirement fund which all working Finnish people have.

 

With today's political climate and future political development, climate change etc. I don't personally think that most of the human race will survive the next about 35 years or so after which I will retire...

And with the constant worsening of the healthcare system etc. it is quite unlikely that I will live past about 70 or so...

I think the best retirement plan for me would be to purchase some good apartments and rent them out, then live with the rental income. and my children would have those apartments after I die so that the money would not go to waste if I die prematurely which is highly likely with the current political development I think :unsure:

 

 

 

If it makes you feel any better Phil, a Production Manager friend of mine in Canada says that apparently the average age of death in the Canadian film industry is just 55 years of age. If we can assume a comparable sort of statistic for those of us in similar western countries, then all this talk of retirement is really just a waste of time for most of us anyway! :)

 

And on those happy notes….here is a very funny YouTUBE cat video!!!! Take it away!

 

https://www.youtube.com/watch?v=5dsGWM5XGdg

 

R,

[Max Field]

The presentation in that video is so forced it seems facetious.

[timHealy]

In addition to some of the other financial options, no one here has mentioned a 401k with their employer. My union has one (it took a long time to set up) I try to max out my contributions every year to take advantage of the tax deduction. Or put the tax payment off into the future.

 

My wife and I also have a two family house. Its nice to get the rent check instead of paying it out.

 

Some of my friends and peers rent equipment to increase their income. Many production managers would gladly prefer to pay the crew instead of a rental house especially if they can rent it cheaper. That gets harder to do on large studio films who are concerned about conflicts of interest.