Do artists really retire? Many people often think that artists don’t ever retire and keep working until their deathbeds. Hell, younger I used to believe I’d keep working forever until I die. But that’s the eternal, naïve and invincible youth talking. Of course, everybody’s bodies and health fail as one starts to reach a certain age and by then, one needs to ensure that they’re comfortable financially to sustain themselves and live their lives in dignity until the end. Something that 2020 has taught me is to never take anything for granted, especially not our finances… or our health.
So, is retirement for artists even possible? How do most of them ensure that they have sufficient funds to sustain their lifestyles when they cannot depend on their work to generate revenue? Well, it turns out that for an employed artists (say, an Animation artist who’s worked for Disney for 25 years of their life), they might be able to count on their company-funded pension plans. In more socialist-type countries, employed artists might have government-funded pensions, thanks to higher salary deductions done throughout their working years.
Side note – If you’re working at a company right now, and that your employer is able to fund your pension plan – then you must absolutely ensure that you are enrolled. This would basically be free money saved for your future. If your employer does not fund your pension plan, then it is very important that you follow the steps I’m about to give you.
So what about the self-employed artists and retirement? Well, it was very hard for me to find a lot of information about this important topic. For some reason, society seems to think that artists just work forever and never need to retire. I don’t like this concept because it supposes that artists are workaholics or that retirement is not an option for them. Not only self-employed artists are barely educated about investment, personal finance or saving, but the notion of retirement is almost taken away from them.
But that leads me to take a step back and ask myself what is even retirement? Is it just lounging on a Caribbean beach not doing anything except drinking margaritas? Is it just doing gardening, playing bridge with friends, finally write that memoir? I don’t know many artists who’d relish at the idea of doing any of these. Actually, there were many studies made about how retiring from the workforce increases the risk for people to develop health issues, including mental health issues. No matter what we think of it, work gives us purpose. We thrive when we think we are being useful or going after a goal. So, is retirement even useful for artists?
My Rant about the Word “Retirement”
Retirement has the word “retire” and it pre-supposes one person leaves the spotlight, leaves something to go hide somewhere else and let the youth take over for them. But so many of the world’s biggest changes were done by people over the age of 65. I think the word retirement is outdated and it should be changed to another notion: Realization. This is based on the theory of Individuation brought up by Carl Jung where he explains the different development stages of the self. I like realization more than retirement, because it supposes that the person has learned many things from their life, having acquired wisdom so their main motivations are to leave a legacy rather than “retire” from life.
During this important time of one’s life, one should be focusing their time on important things. When you are focusing on important things, like spending time with your grandchildren, writing your memoir or finishing this masterpiece that should be the elegy of your entire life, you shouldn’t be worrying about money. That’s why it is important that you have a retirement financial plan – One that would ensure that you take full advantage of your “realization” years.
Steps to Save for Retirement as a Self-Employed Artist
So, what do you do when you don’t have an employer or government pension fund? Well, you start to save. You can start small but ideally, you should start early. The more years you wait to save and invest your money, the bigger chunks of money you’ll have to put aside later in your life and this might even discourage you from saving for realization altogether.
But how do you know how much money you need to save for realization? Well, you can use this type of calculator. By entering your age, revenue, you will know how much money you need to save throughout your life in order to be comfortable at the time of realization.
Now, how do you save? The most important thing is to automate e-v-e-r-y-t-h-i-n-g. I suggest you do either following things:
- Take a percentage off from every paycheck you get and send it automatically to you retirement fund
- Have a fixed-amount of money taken off from your cheque account and sent to your retirement fund/investment fund every week or month.
Second step is to ensure that you do not let your money rot in a checking or saving account. If you do that, you will automatically lose 2-5% of your money’s value every year due to inflation. And please, please, do not leave a huge chunk of money under your bed mattress. If there’s a fire in your home, that money will be gone forever. I recommend you save your money in a registered investment account like a Roth IRA or even an individual 401k. That way your money will be invested in either bonds, stocks or ETFs (depending on your investment profile, level of risk and time horizon) and it will grow over time by the magic of compounding.
So here you go, it is quite simple to save for retirement, even as an artist. The most important is to start today. It is never too late nor too early to start thinking about this. This is your life, and I want everyone – especially artists – to thrive financially during their lives all the way until the end.
So here it is – my take on retirement for the artist. What did you think of this article/video? Did it resonate with you? What do you think of the word retirement – does it excite you or does it make you cringe like in my case? I’m curious to hear about your take on this – please feel free to leave a comment below and ask questions too. I’m here to answer and help you out – because I’m tired of the idea that artists cannot be financially stable.
Stay tuned for next week’s post on the Financial Creative.