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Old 04-03-2016, 05:52 PM   #6 (permalink)
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Originally Posted by Sparrow View Post
lol #USA
To expand on that a little further, retirement in the US is basically based on three pillars: employer sponsored pensions (or state pensions), private tax-advantaged savings, and Social Security.

Some of your income is taxed for Social Security, and you can voluntarily save some of your income in tax-advantaged accounts to invest over time. State employees still typically get pensions, though they are often underfunded and subject to debate. Employer-sponsored defined benefit pensions have been phased out and replaced with employer contributions to those tax-advantaged savings accounts.

The challenge of working in the arts is that there's definitely no first pillar, and if you aren't diligent about it/don't make enough to save, there's no second pillar, either.

That just leaves Social Security, which you can collect starting at age 62 (at a penalty) or at 66 (the full benefit). Full Social Security benefits are based on your earnings with an absolute minimum, but that minimum is pretty low. The average person collecting Social Security gets a bit less than $16k a year, which amounts to poverty in the absence of other money.

So if you work in the arts and have an irregular income and never save in tax-advantaged investment accounts, it's very possible to get totally underwater and end up impoverished in retirement. We just don't have the same baseline, guaranteed pension benefits as some other nations.
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