How to save for retirement if you work in the gig economy
Gig workers need to get a hustle on.
While most canada goose outlet jackets Americans haven’t canada goose clearance saved enough for retirement GOBankingRates reports that 42 percent of us have less canada goose outlet new york city than $10,000 saved and expect to retire “broke” the Canada Goose online future for freelancers looks especially canada goose outlet in usa bleak.
More than one in three workers today are doing on demand work, such as driving for Uber and Lyft, renting their homes canada goose outlet out on Airbnb, doing handiwork on TaskRabbit, as well as more traditional side hustles in sales, writing, website development and graphic design, according to Intuit and Emergent Research. And these on demand gig workers will number 92 million in the next four years, making up 43 percent of the workforce by 2021.
But 1 in 4 (27 percent) of workers whose gig job is the main source of income have $0 saved for retirement and 1 in 5 (21 percent) have less than $1,000, according Betterment’s Gig Economy and the Future of Retirement report, released Thursday. The online investment company surveyed 1,000 US gig workers aged 25 and up, half of which rely on their gig economy job as their primary source of income and half who supplement a full time job with a side hustle.
Seven in 10 full time “giggers” say they are so unprepared to Canada Goose Parka maintain their current lifestyle during retirement, that 1 in 5 expect to keep picking up gig work even after they are supposed to be “retired” and 12 percent of those with full time jobs will keep canada goose outlet uk their side hustle after they’ve “retired” from their 9 to 5 to make ends meet.
The canada goose jacket outlet problem is, most gig workers (61 percent) are using their side hustles to pay off debt, which stacks up to more than $10,000 for almost half goose outlet canada of them, so they’re not thinking about the future. And because so many are self employed, the onus is on them to set up a retirement account, whereas those who work for a company might have a 401(k) set up canada goose outlet shop for them.
“There are unique challenges that the gig economy workers have. It’s harder to get started because you have to take more initiative; retirement savings don’t come directly out of your paycheck,” Nick Holeman, senior financial planner at Betterment, told Moneyish.
“But on the plus side, when you work in a typical 9 to 5, you are held captive to the 401(k) provider that the employer chose you don’t get to pick,” he added. While 59 percent of them use a digital platform for work, only 19 percent use an automated savings tool or app to save money. In fact, 42 percent store their cash at home, where it’s not gaining the compound interest that investing into a retirement fund like Roth IRA would. And these tools can simplify things tremendously.,
“As Canada Goose sale a self employed individual, your income is likely to fluctuate a lot more than a typical canada canada goose black friday sale goose outlet parka salaried employee and because of that, your tax bracket might change year to year,” said Holeman. “Platforms like Betterment can allow you to review your tax bracket on an annual basis and automatically recommend which accounts might be better for you.”
Your homework for today: Take stock of how much money you have in all of your bank accounts, any retirement accounts you’ve picked up from various jobs, what’s hidden under the mattress, etc., and see where you can consolidate what you’ve saved so canada goose outlet uk sale far.
“A lot of people don’t have a very clear picture of their standing right now; they might have multiple accounts across different companies, overlapping investments and redundant fees buy canada goose jacket cheap that they don’t even know they’re paying,” said Holeman. “Simplification is your best friend, so get organized.”
Then it’s canada goose coats time to sort out how much you need to retire (a rule of thumb is $1 million to $1.5 million) and no matter near or far you may be to that canada goose black friday sale goal, it’s time to get started tucking money away each month. No amount is too small to get started and Moneyish has tips to bumping up your emergency fund here (and gig workers should have six months of expenses saved up, to https://www.cheshuntteamministry.org.uk handle the ebbs and flows of your cash flow) as well as ways to get started on saving for retirement. These canada goose outlet store articles help you start with baby steps: figuring out how much money you can afford to save each month, as well as ways to automate your contributions so that you don’t even have to think about them, plus tips to trimming your spending, such as unsubscribing from unnecessary memberships that are siphoning your money away, or reigning in your credit cards.
“Catching up when you’re dramatically off track, to cheap canada goose begin with, can feel daunting or hopeless but no one expects you to change your lifestyle overnight,” assured Holeman. “When I talk with clients don’t expect them to cut their budget in half tomorrow, or move from Manhattan to Arkansas for lower housing canadian goose jacket costs; that’s not realistic. It’s just focusing on incremental changes.”.