Earn Rewards: Sign up now and earn a special reward after your first deposit. See offer details

Now available: New and improved Socially Responsible Investing portfolios. Learn more

<title>Dismiss</title>

Betterment

Save, invest, retire

GET — On the App Store

View
<title>Dismiss</title>
Loading

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.

Articles by Jamie Cartwright
By Jamie Cartwright Senior Product Manager - Growth, Betterment Published May. 18, 2018
Published May. 18, 2018
2 min read

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.

Recommended Content

View All Resources

Compound Interest Can Help Make You Rich

Don’t miss out on one of the most powerful tools you have at your fingertips.

Investing in Your 20s: 4 Major Financial Questions Answered

When you're in your 20s, you may be starting to invest or you might have some existing assets you need to take better care of. Pay attention to these major issues.

Can You Have a 401(K) and an IRA?

This is a great question. The answer is yes, you can have both. Should you have both? It depends.

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.

See details and disclosure for Betterment's articles and FAQs.