I get a number of fifty and sixty-something animation veterans through my office who wonder aloud if they're going to be able to retire with enough cash flow to avoid living in a trailer in Barstow. This article by financial advisor Rick Ferri might offer a bit of comfort.
A well-diversified, passively managed portfolio of low-cost index funds has fared well for retirees over the years despite volatile market conditions. Modest annual withdrawals from conservatively managed portfolios should not have caused retirees any concern about running out of money. For most portfolios used in this analysis, accounts ended with higher values than their starting point in 1999 even with withdrawals and difficult markets. ...
A moderately-aggressive retiree who maintained a 50 percent stock and 50 percent bond portfolio and took out $3,333 per month ($40,000 annually) [from a $1,000,000 portfolio] over the past 12 years ended with a March 31, 2011 balance of $1,114,947. The monthly low point occurred in February 2009 at $783,174 and the monthly high point occurred on October 31, 2007 at $1,169,803. ...
The question many will have is, Who the hell is going to be able to scrape together a million freaking dollars? but it can be done, especially if you start early and tuck money into stocks and bonds year by year. I know a bunch of TAG members who, between the Individual Account Plan, the TAG 401(k) Plan and personal investments, have managed to squirrel away several hundred thousand dollars. A few put the bonuses they received during the nineties into investments (resisting the temptation to leap into bigger houses and high-end cars) and are now happily retired, though they are still in their fifties.
This is a topsy-turvy business, and lucrative employment is often followed by stretches of unemployment, so it's not always easy to save for your sunset years. But if you don't have a roadmap to retirement and the discipline to follow it, you'll be kicking yourself later.
Attached to the top-most link, you will find a spreadsheet listing different withdrawal rates for different asset allocations for a million bucks. Take a look at it. You'll find that it's eye opening.
Add On: Here's a boglehead discussion thread for the article above.
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16 comments:
I like these kinds of posts, please keep them coming Steve.
I read a lot of posts complaining that people won't be able to retire comfortably and they will have to work until they're dead. Articles like these makes me believe it's possible to retire in your 60's.
For those who think they will never save a million dollars before they retire, your spending too much now. Just because you make $1800 a week, doesn't mean you have to spend all of it! Learn to live below your means.
For those of you who think a million dollars won't be enough to retire on, I agree. That's why I'm shooting for twice that (maybe even a little more). I started saving/investing in my late 20's, wish I started earlier! I'm in my late 30's now, so I have 25 more years until retirement. With my 401k, IRA, and personal investments at their current levels, I should be able to hit my goal in about 2 decades. The pension and IAP will be icing on the cake. It will take discipline on my part (keep spending low and maximize saving as much as possible), but it can be done.
One last thing, I'm not a story-board artist, director, or someone in the higher job-classifications, so I'm not making a 2 grand a week. If I can find a way to save money, there's no excuse for people higher up the "food chain" not to save.
Directors at these huge studios like Pixar and Dreamworks only make two grand a week? I've always wondered how much they make. And how much they get once the movie makes money.
To Anon@4:04:
Check out this link:
http://animationguild.org/wp-content/uploads/2010/10/WageSurvey2010.pdf
The union only protects minimum salaries. An individual can always negotiate for more. At least one feature director reported $6,000/week! If you look at other job categories, not just directors, some people are making quite a bit of money over union minimum. I'm hoping these people are putting some money away.
I can't speak of any profit sharing after the movie is made.
This doesn't reflect the entire animation industry, only about 20-25% of the wage surveys get returned. For all we know, people could be making tons of money or they are getting peanuts. Hopefully in the future, more people return the survey and we can get a more accurate idea of what the going rates are. I believe names are never posted with amounts, so I don't know why more people don't fill these out.
Maybe they're too busy spending money to fill out the form? ;-)
If it helps the VFX crowd, here's a Google Spreadsheet for VFX wages.
Where did the wage info for that VFX spreadsheet come from?
Directing for animation features is non-union. You are considered management and an employee of the studio that has a contract with you. Wage surveys will not reflect these directors. 7-10K wkly is not uncommon for these positions, but it is not always easy to compare salaries as deals are generally spread out per picture rather than based on time put in. You do not bank hours as a director, so your health and pension are entirely dependent on either the studio or your own contributions. This is the place where the animation feature industry departs TAG and collective bargaining agreements. It is an unfortunate reality for TAG to have leading figures in the industry absent from TAG's ranks to provide guidance and moral support - in the way leading figures in WGA and SAG often are able to do, in varying degrees, for better or worse.
I'm one of those crazy guys who wants to work "until I'm dead."
Thanks to my many years in the union this is a choice not a necessity. I truly feel for my colleagues who failed to bank those valuable union hours or save for retirement.
Floyd:
That's awesome that you want to work so much, I commend your work ethic!
I'm glad you point out that being a union member allows you to have that choice. Too many people rag on our union (which isn't perfect), but I think it's a better deal than not being in the union with regards to retirement/salaries.
Thanks for all of your comments on this blog!
Where did the wage info for that VFX spreadsheet come from?
I got it from this FXDag page. I do not know where the spreadsheet got its numbers.
To 10:55,
His ANONYMOUS head? Get stuffed ageist troll.
Yeah. You're right. Some people just know everything and should never be questioned. Lesson learned.
anon@9:26:
Questioning is fine. If it's done properly, you might be able to persuade the other person to see your point.
If people are going to insult someone about having their head up some one's ass, expect insults back.
You act like that hasnt happened. People (myself included) have been questioning Floyd over and over and over and yet the man still rags on Disney. Constantly. Even when things are looking better for the mouse house.
And the sheep listen and follow. So I called the sheep (not Floyd) a name. Not the end of the world.
These posts are unsettling to those who have had long periods of no employment or non-animation employment that paid very little, had several illnesses that drained every spare dollar, and are thus five years away from "retirement" age with zero in the bank and no assets despite having lived frugally. When paying the bills leaves nothing behind, saving is impossible.
Please let's forget these people who hate Floyd and people who like Floyd.
The topic is about retirement/financial planning, etc. Can we get back to the topic?
Thanks.
TOPIC POLICE SMAAAAASH
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