The growing gig economy means that more people than ever are enjoying the perks of freelancing, making their own hours and working when and where they choose. There are downsides to being your own boss, however, including taking full responsibility for your retirement savings.
Retirement saving and planning, however, is not a focus for most American freelancers, with many planning to simply continue working past what has been the traditional retirement age, according to a new report from the Aegon Center for Longevity and Retirement.
The study finds that nine in 10 self-employed Americans cite positive reasons for becoming self-employed, and that they have a median income of $46,000. That’s about $10,000 less than the overall median income in the United States, which may make it harder to set aside money for retirement.
“The self-employed face unique challenges in terms of saving and planning for retirement, such as irregular incomes and a lack of access to employer-sponsored retirement benefits,” Catherine Collinson, executive director of the Aegon Center for Longevity and Retirement. “For the self-employed, preparing for retirement requires a long-term, do-it-yourself approach which many are not undertaking.”
Just over a third of self-employed Americans say that they’re habitually saving for retirement, and only a quarter are confident that they’ll be able to full retire with a lifestyle that they consider comfortable.
For many self-employed Americans, the plan is to simply continue working. Just 15 percent of American workers plan to completely quit work when they retire, while 46 percent say that they’ll scale back.
While the average planned retirement age for American freelancers is 66, more than half of self-employed Americans plan to work past age 70, and 9 percent don’t plan to ever stop.