Are You a Gig Worker? What You Must Do To Prepare For Retirement

While gig work offers flexibility, it has a significant downside: no employer-sponsored retirement benefits. For millions of freelancers and other independent workers, this means taking retirement planning into their own hands.

“The biggest retirement mistake gig workers make is not saving for retirement,” said Chloé A. Moore, a certified financial planner, founder of Financial Staples, and part of Investopedia’s advisor council. While a significant challenge, there are more and better retirement savings options specifically for independent workers than just a few years ago.

The Retirement Savings Gap for Gig Workers

Studies suggest that about a third of U.S. workers are part of the gig economy, with the percentage of those for whom it’s their main or full-time job is 4.3%. Unlike traditional employees who often have access to employer-sponsored 401(k) plans with matching contributions, gig workers must navigate retirement planning entirely on their own.

“Most likely, you will not have access to an employer-sponsored retirement plan, and you’re not building a business that you can eventually sell down the road,” Moore said.

This structural shift is creating a stark divide between those with employer-sponsored retirement benefits and those without. The unpredictable income that many gig workers experience makes consistent saving particularly challenging. Like much else in gig work, more effort will fall on your shoulders. However, this isn’t just a problem for gig workers: only 56% of workers participate in an employer-based retirement plan.

Moore noted that “the amount needed to save for retirement is based on a number of factors (like income needs and desired lifestyle, among others).” Fortunately, “the amount you save and the strategy are more important than the source of income used for retirement savings.”

Retirement Options for Gig Workers

Without employer-sponsored plans, gig workers need to explore alternative retirement vehicles. Here are what experts say are the most effective options:

• Individual retirement accounts (IRAs): Traditional and SIMPLE IRAs may offer a tax deduction for contributions depending on your income and whether you or your spouse has a workplace retirement plan.
• Simplified employee pension plans (SEP IRAs): The self-employed often use these because contribution limits are higher.
• Solo 401(k)s: These plans allow for higher contribution limits than standard IRAs.
• New platforms: Companies like Robinhood Markets Inc. (HOOD) are launching retirement savings plans specifically for gig workers. For example, Robinhood’s program works with Gopuff, Grubhub, and TaskRabbit to provide their independent workers with retirement options. Benefits include a boosted match ranging from 1% to 3% for the first year (subject to a five-year holding requirement).
• SECURE 2.0 Act benefits: Starting in 2027, the “saver’s match” provision will offer eligible low- and moderate-income gig workers a federal contribution of up to 50% on the first $2,000 contributed annually to retirement accounts—a potential $1,000 yearly boost to your savings.

“It is important to start saving for retirement as early as possible,” Moore said. “The longer you wait, the more you’ll need to save. With compound interest, even small amounts invested consistently over time can lead to a sizeable nest egg in the future.”

The Bottom Line

Creating a secure retirement as a gig worker isn’t impossible—it just requires more planning amid more fluctuating income than traditional employment. Start by establishing an emergency fund to weather income fluctuations, then commit to consistent contributions to a retirement account that matches your needs and income level. “Creating your own retirement plan is critical so you can eventually achieve financial independence,” Moore said.