Gig work is on the rise and has been for several years now. Some studies and surveys suggest that gig work will take up a majority of the work efforts in the coming years. Gig work has become more attractive to workers of all ages. Millennials, Gen X’ers and Baby Boomers all enjoy the flexible hours and free will to take on jobs or decline them. Although, the gig economy is growing all across the country, some workers are experiencing trouble when it comes to retirement. Many companies offer their employees retirement plans while they are with them. For gig workers, they have no direct employer that they work for on a consistent basis to be eligible for these kinds of benefits. Because of this dilemma, gig workers have to find creative solutions to retirement. Here we will talk about some of those options for the rising gig economy workers.
What Kind of Retirement Plan
The kind of retirement plan you choose depends on how much money you are making from your gig work. If the gig work that you are doing is your main source of income then you may want to us a retirement plan that allows you to put more away over a longer period of time. If the gig work you are doing is supplemental income to your normal job, you can still create a retirement plan for yourself based off of that income. Some good retirement plan options for gig workers include SEP-IRA, a Simple IRA, and an Individual 401(k).
Other Financial Concerns
Finding a retirement plan for gig workers who depend on the gig economy as their main source of income is difficult enough. There are other financial difficulties that come up working mainly in the gig economy. Gig workers sometimes prolong their retirement because of their need for more savings and financial stability in retirement. Prudential recently completed a study that found around fifty two percent of full-time company or corporation workers had a retirement savings plan where around sixteen percent of strictly gig workers had one. Some people who do get into gig work prefer being able to work after they retire from their normal company job. Gig workers can find a sense of purpose and something to help pass the time and maybe even learn new skills. Whatever the reasoning is behind getting into the gig economy, workers should be prepared and well-equipped to deal with the changing landscape and know their retirement options when the time comes