Retirement in the gig economy
The gig economy is rapidly changing the nature of employment and the way we think about work. According to a study, 36% of the U.S. workforce, or about 57 million people, are now participating in the gig economy. And it’s expected to keep growing, with some experts predicting that by 2027, the majority of the U.S. workforce will be made up of gig workers.
As a gig worker, you’re probably used to the freedom and flexibility that comes with freelance work. But have you thought about how the gig economy will affect your future retirement? If you’re like most gig workers, you probably haven’t given it much thought – after all, there are more immediate concerns like finding your next gig or paying your bills.
But the truth is, the gig economy does have implications for retirement, and it’s important for gig workers to be proactive in preparing for their golden years.
Here are a few things gig workers need to know about the gig economy and the future of retirement:
- Traditional retirement plans don’t always apply. As a gig worker, you’re likely classified as an independent contractor, which means you don’t have access to traditional retirement benefits like 401(k) plans and pension plans. So you’ll have to be more proactive in saving for your own retirement, rather than relying on an employer to do it for you.
- Social Security may not be enough. Social Security is a federally funded program that provides financial assistance to seniors who are no longer able to work. As a gig worker, you’re still eligible to receive Social Security benefits when you retire. However, the amount you receive may be lower than what you’d receive if you were a traditional employee. This is because Social Security benefits are based on your earnings, and gig workers often earn less than traditional employees due to the lack of benefits and job security.
- You’ll have to plan for your own retirement. As a gig worker, you’ll have to be more proactive in planning for your own retirement. This means setting aside money for your golden years and investing it wisely. You might consider opening an individual retirement account (IRA) or saving in a high-yield savings account. It’s also a good idea to consult with a financial advisor to create a retirement plan that’s tailored to your needs and goals.
- The gig economy is here to stay. The gig economy isn’t going away anytime soon, so gig workers need to be prepared for the long haul. This means being proactive in saving for retirement and planning for the future. Don’t wait until you’re in your 60s to start thinking about retirement – start planning now so you can enjoy your golden years with peace of mind.
So, what can gig workers do to prepare for retirement in the gig economy?
Savings & investments
The first step is to start saving and investing for your future. As a gig worker, you don’t have the luxury of a traditional employer handling your retirement planning for you, so you’ll have to take matters into your own hands. This means setting aside money for your golden years and investing it wisely. You might consider opening an individual retirement account (IRA) or saving in a high-yield savings account.
It’s also a good idea to consult with a financial advisor to create a retirement plan that’s tailored to your needs and goals.
In addition to saving and investing, gig workers should also consider purchasing insurance to protect themselves and their families in case of unexpected events.
This might include health insurance, life insurance, and disability insurance. As a gig worker, you may not have access to traditional benefits like these, so it’s important to have a solid plan in place to protect yourself and your loved ones.
Unions & professional organizations
Finally, gig workers should consider joining a professional organization or union to access resources, support, and a sense of community. In the US that could be the Freelancers Union and in the UK IPSE.
Professional organizations and unions can provide gig workers with valuable resources like legal assistance, training, and networking opportunities. They can also advocate for the rights of gig workers and work to improve working conditions.
By joining a professional organization or union, gig workers can build a support system and feel more connected to the gig economy community.
Gig workers need to be proactive in preparing for their future retirement. This means saving and investing for their golden years, purchasing insurance to protect themselves and their families, and joining professional organizations or unions for support and resources.
With a little bit of effort and planning, gig workers can succeed in the gig economy and enjoy a comfortable and secure retirement.
Remember, as a gig worker, you have the freedom and flexibility to shape your own career path. By being proactive and planning for your future, you can create the retirement you want and deserve.
Find what Wedo can do for gig workers and freelancers:
Use Wedo’s Freelance Freemium Tools & Social Network: 11 Powerful Benefits
30 Powerful Gig Economy Freelancing Tips for Success: How Wedo Can Help You Thrive