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The gig economy has changed work in America in a big way over the past several years as former full-time employees turn to freelancing, driving for Uber, or taking one of the growing number of remote, self-employed roles available.
And there’s one group that could majorly benefit from this rise in flexible work: retirees.
Aging and retirement expert and author Elizabeth White expects freelancing to become a norm for older Americans. During the coronavirus pandemic, when many older workers are being faced with the choice of continuing to work and facing infection, or retiring, the gig economy provides an alternative.
In her book, “55, Underemployed, and Faking Normal,” White explains that the boomer generation could not only find purpose in freelancing and gig work during retirement, but also get around ageism in the workplace and pad retirement savings that are often too small.
Many older Americans haven’t saved enough — and while gig work won’t fix the problem, it won’t hurt
For many baby boomers nearing retirement or in retirement, saving didn’t come easily and balances haven’t added up to the amount they’d expected. According to data from Vanguard, Americans aged 55 to 64 had a median 401(k) balance of $61,738 in 2019. While that amount doesn’t include any funds in other retirement accounts like IRAs, it’s still a number too small to last for many years, even with Social Security payments.
Data from The New School’s Schwartz Center for Economic Policy Analysis shows that as many as 40% of older American workers face downward social mobility in retirement, and that working longer can’t fix it.
White says that freelancing isn’t a complete fix, but it could be a cushion. “It’s definitely not the answer to all of our financial woes,” she writes. “But in this environment, where many of us will have to cobble together multiple income streams to make a living, are we being too quick to dismiss ‘side-gigging’ as only for millennials?”
It’s worth noting, White says, that gig work doesn’t compare financially to full-time work. “If you’re unemployed, independent work or ‘gigging’ most likely won’t replace your old income,” she writes. “But if funds are tight, it can help with cash flow while you figure out what’s next.”
She adds, “You may be able to piece together enough income to put off filing for early Social Security and avoid reducing your ultimate benefit.”
Gig work could help older Americans work around ageism
Older Americans face ageist struggles in the workplace. “Statistics show that if you are over 50 and unemployed, the duration of your unemployment is going to be substantially longer than that of your younger counterparts,” White writes.
However, she posits that self-employment could help older workers get back to work, despite gaps in resumes or other setbacks, as it offers a “path around the rampant age discrimination that many of us experience when looking for traditional work.”
While it doesn’t come with the benefits or consistency often provided through traditional full-time work, it can provide an adjustable schedule and the ability to work as much or as little as you’d like. For Americans who don’t “hold tight to old models of work,” White writes, the gig economy could provide a helpful way around the challenges of work that can hold back older Americans.
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