The VFX Freight Train Of Retirement

How much return you could get with the TAG Individual Account Plan

This is my favorite calculator for figuring out retirement because you can make some wild assumptions:

  • Let’s say you are a 20 year old vfx worker that makes $100,000 a year for 45 years with a 3% bump each year.
  • At age 65 you will retire and live for another 25 years and kick the bucket at age 90.
  • Lets also assume that you’ll actually only need $70,000 in income during retirement since you were probably busy paying off a mortgage during your working years.
  • Let’s also correctly assume that you paid into social security and expect to receive about $25,000 a year in retirement.

If this seems too rosy to you it’s because it should. I want to show you how hard it would be for even a successful vfx artist to save for retirement.

In order to retire, you would need to have about $780,000 by age 65.

In other words, you would need to somehow save more than $17,000 a year starting at age 20 to age 65.

Did I scare you? I hope not because it gets worse.

Let’s further assume that you listen to me and start saving $17,000 in a mattress or some low interest account that you promise not to touch. Well, you aren’t out of the woods yet.


The costs of goods like gasoline, food, cars, etc are always rising. Government and economists are always measuring this phenomenon. They call it inflation. Most experts say the price of things rise about 3% a year. This is also supposed to be true for salaries which is why I included that in the assumption above.

The problem is even if you put $17,000 under your mattress, it’s purchasing power will erode to much less than that in 2055. What you can purchase for $17,000 today will probably be only able to purchase $2500 worth of goods in 2055.

So if we factored inflation into your retirement, that $780,000 that you’ll need in 2055 is actually almost $3 million! You would have to save almost $70,000 a year for 45 years to get there.

So why aren’t people blowing their brains out yet and happily able to retire?


One way to beat the inflation shark is to invest in the value of the very goods that cause inflation to rise. There is an index that actually measures the value of a very broad range of companies that has been around since the 1900s. Even through the very worst depression of the 30’s and the booming economy of the roaring 90’s, the S&P 500 has been a reliable index of a large blend of companies that has an 8% lifetime return.

Compound Interest

I purchase the S&P 500 every week and I intend to do that for the rest of my life. Will the price go up and down? Yes but I will also get profits paid to me for each share I own. Since the S&P generally returns 8% any profits I make are re-invested. This recursively keeps happening over my life and grows exponentially faster near my retirement. This phenomenon is called compound interest and there is a great calculator that can do this for you.

So remember that $17000 you needed to save each year? Well if you wisely invest it and let it compound for 45 years at just an inflationary rate of 3% you would have $1.6 million dollars waiting for you.

Thats great but where the hell are you going to get $17000?! You can’t even save half of that.

Why The Guild Is So Important For Your Retirement

This is why I think it’s so important to join the animation guild. The 3 retirement plans they offer are great because 2 of them you don’t have pay a dime for.

  • With the Individual Account Plan offered by the guild you would get about $6000 a year based on a 100k income. If we used my assumptions above and a conservative return of 6% about $1.4 million would be waiting for you at retirement. You didn’t have to pay a dime for that.
  • The Defined Benefit Plan offers a monthly income when you retire for the rest of your life. If you worked 45 years in the guild at 2000 hours a year, you would have an annuity worth $3500. When you die at age 90 about $1 million dollars would have been paid to you. Again, you didn’t have to pay a dime for that.
  • The 401k is the only thing you pay for and its your choice. It would be wise to pay into this because you get to basically use tax money to save for your retirement. Let’s say you agree to just put 10,000 a year away. At 8% growth you would $4.4 million.

So you could theoretically have a total worth of $7 million in retirement waiting for you at age 65. All you had to put in was $10000 of money that probably would have been used to pay for taxes.

It’s A No Brainer.

What’s so painful is that it’s so easy to get this done. Just sign a rep card.

The problem with vfx artists are that we are so busy geeking out about working 100s of hours on a movie with 10 foot tall blue people who use usb cords connected to the back of their heads to screw each other. We don’t deal with problems unless they are 5 feet in front of us. I once ate at a fast food joint and saw a very old and frail man mopping the floor. I couldn’t help but wonder: When did he realize that he didn’t save enough to retire?

The freight train of retirement only gets faster with time and grows heavier with inflation. Will you be able to get out of the way when it’s 5 feet in front of you? I’ll end it with a line from Star Trek:

You are capable of choosing your own destiny.

The question is:

Which path will you choose?

Soldier On.

2 Responses to The VFX Freight Train Of Retirement

  1. I think it is important that we have a global guild not for the purposes of labor negotiations but for the purposes of benefits, retirement, training, certification, etc.

    Glad to see someone is making the effort.

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