|When talented musicians join forces, they epitomize Aristotle’s maxim: “the whole is greater than the sum of its parts.” Collaboration is the essence of music, and even the most technically proficient soloists benefit from an ensemble framing and highlighting their skills. You can’t whistle a symphony. It takes a whole orchestra to play it.
It’s always sad when your favorite band breaks up or loses a key player, especially for non-artistic reasons. The Beatles broke up, in part, because John insisted on dragging Yoko everywhere he went. The Grateful Dead fired keyboardist Keith Godchaux because he did too many drugs. (Really.) And last week, rappers Public Enemy fired their flamboyant clock-wearing co-founder and hype man Flavor Flav.
The move leaves Flav at a crossroads. He and bandmate Chuck D have worked together since 1985 — an eternity for artists. He’s starred in VH1’s Flavor of Love, put out solo albums, and licensed his name to a couple of ill-fated chicken restaurants. It’s hard to picture him settling into one of those Florida “55+” communities, buying a golf cart, and binge-watching cable news until the doctor calls with a bad biopsy. Yet he faces the same financial challenges as any other corporate castoff looking down the barrel of an unexpected early retirement:
- Where will he roll his 401(k)? Don’t scoff at the notion of a band sponsoring a retirement plan — years ago, the Grateful Dead gave their employees retirement plans, health benefits, educational trusts for their children, and profit-sharing bonuses for tour revenue and song royalties. Way back in 1984, they gave their bookkeeper paid maternity time for as long as she wanted it.
- Should he convert his qualified money into a Roth? Low-income years offer great opportunities to eliminate future taxes and required minimum distributions. Flav’s income will probably be down while he ramps up new projects, so now might be perfect for this strategic move.
- When should he start taking Social Security? He’s 60, which makes him eligible in just two years. But if he keeps working while he draws benefits before ordinary retirement age, he’ll lose $1 in income for every $3 in earned income above a specified threshold (currently $18,240).
- Where will he find health insurance until he’s eligible for Medicare at age 65? Family coverage won’t be cheap at his age. Which would be more tax-efficient for unreimbursed expenses, a health savings account or a medical expense reimbursement plan?
Flav’s comical fashion sense surely doesn’t float everyone’s boat. But he deserves credit for fighting the power. He never abandoned his youthful style, even when the AARP solicitations started landing in his mail. Could his trademark clocks (he owns over 100) actually be tax-deductible? The general rule for uniforms and work clothes is you can write them off if they’re “not suitable for ordinary street wear.” Would you go for it?
Us Magazine is famous for their weekly photo roundup: “Celebrities — They’re Just Like Us.” And of course it’s more fun watching Mark Wahlberg work off a sackful of Wahlburgers than watching Flav make beneficiary elections on his IRA rollover. But that sort of planning pays off big time in the long run. So call us for help with those choices before the clock runs out!