Rose Greene talks with Joe Mont of The Street about the individuals behind Hollywood’s cameras and the often unsteady work they experience. Read the full article below.

HOLLYWOOD, Calif. (TheStreet) — Hollywood is a land of dreams, celebrities and glamour. 

But behind the cameras and outside the trailers, thousands of Tinseltown’s lesser-known figures toil. There are assistant directors, electricians, hairdressers and extras, all of whom make the stars shine

Behind the cameras and outside the trailers of Hollywood are workers who, working with the stars but without their massive paychecks, get into some rare financial problems.

But unlike celebrities, these workers don’t pull in the massive paychecks ensured by boffo box office. The money isn’t necessarily meager, but the work is unsteady.

“People think that these folks make a lot of money — and if they were working 12 months of the year, that would be an accurate statement,” says Rose Greene, a financial adviser based in Santa Monica, Calif. “But now, it is about getting one or two jobs that last eight to 12 weeks, followed by six months of nothing.”

Many of Greene’s clients come to her for advice on how to best manage erratic finances, meet expenses and still provide for their retirement. Their predicament is all too familiar to the scores of U.S. workers who are freelancers or face seasonal employment — except that here you worry about money while fixing Natalie Portman’s makeup or tailoring George Clooney’s wardrobe.

She says her Hollywood clients typically fall into two camps.

One group is fully aware of the threat posed by the variability of their income stream and carry a real anxiety.

“Their radar is up, and when they get a gig and bring in some money, they slam it away and they put it into cash,” Greene says. “It is very hard to get them to move out of low-risk, low-return investments because they are always thinking that they are going to need that money when their jobs dry up. At least when they hit a dry spell they’ve got that stash that they work off of. They may be stressed about it, but they are not necessarily worried about their next mortgage payment.”

The other half “live in the moment and don’t really want to think too far in the future,” Greene says. “They do throw a little in the pot when they have a fairly consistent job, but when that dries up they just suck up everything they had put away. They just empty the tanks.” This group is particularly vulnerable to buying into the perceived Hollywood lifestyle. Sitting on set for 10 to 12 hours a day, dealing with talent than earns upward of $1 million per TV episode, can give them an unrealistic view of money.

“In their minds they should be living that fantasy life,” Greene says.

Developing a proper financial plan is a distinct challenge for both groups.

“I don’t think people really appreciate the insecurity and how difficult it is to manage cash flow,” Greene says. “They really don’t have any idea just exactly when that next job is going to come up. They don’t know whether to save for three months, six months or a year. It is really nice to map out a strategy on paper, but applying it to real-time situations is much more of a challenge.”

Most of Hollywood’s behind-the-scenes workers belong to various guilds and unions, which should supply pensions after retirement or disability. Some workers are lulled into thinking these stipends will be enough to live off, but the pensions “are not good ones,” Greene says. “As a result, they are not doing what they need to be doing to build up some other bucket of retirement money.”

Getting this unique segment of the work force to make the right financial moves can take a bit of psychology. For the risk averse with some amount of savings to invest, Greene persuades them to start moving small amounts at a time out of CDs and money market funds and into instruments that offer higher returns but are still relatively conservative. This gradually allows them to realize better returns and accept that “stepping out of the bank doesn’t mean walking into the casino.”

Her other advice is applicable to anyone whose income stream is unpredictable.

“Focus on building up an emergency reserve in a cash or money market position,” she advises. “If I can get them to accomplish that, it is a huge step. Then they will have a bucket that they can look to to tide them over between jobs.

She also advises building out an IRA or Roth IRA.

“People do hold off tapping their IRA money unless they really don’t have any other option,” she says. An IRA makes more sense, because of this, than a regular investment account where pulling out your investments is both easier and ill-advised, given a buy-and-hold strategy.

– Written by Joe Mont in Boston.

Parents won’t pay extra taxes for keeping 20somethings on their health plans.
Provided by Los Angeles Financial Planner, Rose Greene, CFP®

Do you have any employees with young adult children?You probably do. Thanks to a recent IRS ruling, these employees just got a break: they won’t have to pay additional federal taxes if they keep older kids on the company health plan.

On April 27, the IRS stated that employer health care benefits provided to employees’ children aged 26 or younger were “now generally tax-free to the employee” and that this was retroactively effective to March 30, 2010. (Workers can make pre-tax contributions to pay for the expanded coverage.)₁

On April 27, the IRS stated that employer health care benefits provided to employees’ children aged 26 or younger were “now generally tax-free to the employee”

Additionally, this option is also available for select retiree health plans, and even self-employed individuals who qualify for the federal self-employed health insurance deduction.₁

Who qualifies? IRS Notice 2010-38 (the ruling announcing this) defines a “child” as a son, daughter, stepchild, adopted child or eligible foster child. To qualify for the extension of health coverage, a child must be a) younger than 27 at the end of the year and b) already covered under the employer’s plan or added to the employer’s plan before turning 27.₁

So if you sponsor a cafeteria plan, you can now let employees make pre-tax salary reduction contributions to foster this extended insurance coverage – even if the language of your plan has not yet been amended to incorporate the change. Plan sponsors have until the end of 2010 to do that.₁

IRS Notice 2010-38 describes everything in precise detail; you’ll find it online at www.irs.gov/pub/irs-drop/n-10-38.pdf. The extended coverage to “kids” up to age 27 must be provided not later than plan years beginning on or after September 23, 2010. Since most companies have calendar-year health plans, the coverage requirement for many businesses and organizations will start on January 1, 2011.₂

Rose Greene is a Representative with Rose Greene Financial and may be reached at www.rosegreene.com, (310)399-1200 or rose@rosegreene.com.

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information.

Citations
1 – irs.gov/newsroom/article/0,,id=222193,00.html [4/27/10]
2 – workforce.com/section/00/article/27/16/34.php [5/4/10]

Joblessness at 10.0%. This November figure is improved from October’s 10.2% mark. Another bright spot: payrolls slimmed by just 11,000 jobs last month.  (Analysts expected a reduction of around 125,000.)  Are we on the verge of  adding jobs to the economy?  The number of employed people rose by 227,000  last month, the first increase since April.1

Read here for the rest of this week’s economic update:

http://tinyurl.com/yhtom32