Survey: Future Retirees May Rely More on the Gig Economy
Almost 40 percent of respondents feel unprepared to save enough to maintain their lifestyle during retirement.
The so-called gig economy is celebrated for fostering creativity, but has its downsides. Today, more than one in three U.S. workers are freelancers — and this figure is expected to grow to 40 percent by 2020. Increasingly, workers are eschewing or supplementing the traditional “nine-to-five” career with independent or temporary work, but these gig workers face daunting challenges preparing for retirement. Since freelancers don’t have access to employer benefits, such as a 401(k), their savings rate for retirement plan can sometimes be lower.
Analyzing the Financial Effects of the Gig Economy
Recently, Betterment compiled a new report on the impact of the gig economy on the future of retirement in the United States. The report highlights data from a survey of 1,000 U.S. respondents, 25 years and older and working in the gig economy. Several themes emerged regarding two categories of workers: “full-time giggers,” workers who rely primarily on the gig economy for their income and “side-hustlers,” individuals who rely on a traditional full-time job as their main source of income but supplement with a side gig economy job:
Why survey this segment of the population?
From the results, the rise of a modern gig economy may be affecting some Americans’ retirement futures in both direct and indirect ways.
Gigging is the New Retirement Plan
For many respondents, the gig economy is replacing their retirement plan:
- 16 percent plan to depend on gig economy jobs to supplement their retirement
- 12 percent of side-hustlers will keep a side gig job as their main source of income after retiring from their traditional nine-to-five
- 1 in 5 full-time giggers say they’ll continue to pick up incremental work in the gig economy as their main source of income following “retirement”
The Gig Economy is a Debt Economy
Betterment’s survey found that more than half of gig economy workers turn to this new way of working for financial reasons, not just for the freedom and flexibility it provides. While retirement catch-up is part of the equation, debt plays a big role in why 81 percent of gig economy workers say they can’t afford to prioritize saving for retirement.
Being Tech-Savvy Doesn’t Translate to Finances
Giggers are tech-savvy by nature, but there’s a major disconnect when it comes to the way they’re approaching personal finances. Fifty-nine percent of respondents use a digital platform for their job, but only 19 percent use a digital platform for saving and 28 percent use one for online investing.
The full report showcases these themes and other details. Download and read, Gig Economy Workers and the Future of Retirement to get the full scoop.
Basics of a 401(k) Plan
Today’s 401(k)s hold more than $5.9 trillion in assets with over 100 million people contributing. But what is a 401(k) and would your company benefit from one?
Here’s How Other Millennials Are Saving For Retirement
The retirement savings habits of the millennial and Gen Z generations might surprise you.
Jon Stein on “How I Built This:” Reflecting On Our Story
Jon Stein joins NPR’s Guy Raz for an episode of “How I Built This” to look back at how Betterment started, what mistakes were made, and how they turned into learnings for the robo-advisor we are today.
How would you like to get started?
Manage spending with Checking
Checking with a Visa® debit card for your daily spending.
Save cash and earn interest
Grow your cash savings for general use for upcoming expenses.
Invest for a long-term goal
Build wealth or plan for your next big purchase.
Invest for retirement
Set up traditional, Roth, or SEP IRAs to save for the golden years.