Securing the Future: Addressing the Lack of Financial Education and Retirement Planning
The economic outlook for many aging musicians in the U.S. is bleak, as they often lack access to financial education and retirement planning resources. As musicians are essentially entrepreneurs who make most of their income through contracts or gig work, they are responsible for their retirement planning. Unfortunately, this can be a daunting task as financial education is not widely available in the music industry or the educational system. In fact, a recent survey revealed that only 25% of music schools in the US offer courses on financial management for musicians, highlighting the dire need for such education.
Many musicians work on a for-hire basis and do not receive residuals for their contributions to recorded works. This means that they are paid a one-time fee for their work, even though it may continue to generate income for other parties such as bandleaders, producers, and managers. To address this issue, musicians should consider negotiating for residuals when working on recorded projects, as music often requires collaboration between multiple artists.
The lack of financial education and access to retirement planning resources can have severe consequences for musicians, resulting in an impoverished retirement. Even well-known and successful musicians may find themselves in this predicament. Without proper financial planning, many musicians may have to rely on their community for support, such as paying for medical expenses or life-saving surgeries and medications. Furthermore, musicians also have to provide housing for themselves and may not receive benefits from the social security system, depending on how they handled paying taxes.
To solve this problem, it is crucial to educate musicians and the broader community about financial literacy and retirement planning. Universities should also be required to provide foundational financial literacy education to their students, to prepare them for the unique challenges and opportunities of working in the music industry. By taking these steps, we can ensure that musicians can have a secure and fulfilling retirement.