Most freelancers are millennials, but retirees are quickly catching up
PredragImages/Getty Images Plus/Getty
- More baby boomers are turning to freelancing to earn extra income, bulk up retirement funds, or transition into retirement, according to a New York Times story.
- More than 56 million American adults freelanced in 2018, including 30% of workers over age 55.
- In general, a shift away from pension plans and greater longevity are driving more older Americans to continue working well into their retirement years.
- Visit Business Insider's homepage for more stories.
Step aside, millennials - older Americans are carving out their own corner of the gig economy.
Despite being popularized, and often fetishized, by the millennial generation, freelancing is really just the 21st century approach to self-employment. Driving for Uber or Lyft, consulting individuals and businesses, teaching yoga, or maintaining a more "autonomous version of their previous career," are just a few ways pre-retirees and retirees are showing up in the freelance world, Cowles reported.
Baby boomers' willingness to dive into non-traditional work is as much a sign of the changing times as it is a strategy to bulk up nest eggs, rebound from job loss, or transition from a 9-to-5 into retirement.
"For many American workers, the traditional picture of retirement - turn 65, enjoy a boozy send-off with colleagues and sail into your golden years supported by a healthy pension - isn't realistic anymore," Cowles writes.
Caitlin Pearce, the executive director of the Freelancers Union, the United States' largest advocacy group for independent workers, told Cowles that many Americans over 55 are beginning to venture into part-time or even full-time freelance work for extra income.
According to a survey conducted by the Freelancers Union in partnership with Upwork, more than 56 million Americans freelanced in 2018, representing about one in three adults. Specifically, 30% of folks over age 55 said they did freelance work last year, compared to 42% of 18-to-34 year olds.
Contract work can also be a useful strategy to ease into retirement. About two-thirds of the over-55 freelancers said they're doing it to transition into their golden years.
Good health is driving many older Americans to keep working
A previous analysis of US Census data by United Income, an investment and financial-planning firm, found that about 20% of Americans over age 65 - a total of 10.6 million people - are either working or looking for work, representing a 57-year high.
The notable increase in retirement-age workers could be explained, in part, by the shift away from workplace pensions and toward defined contribution plans, like 401(k)s, Lincoln Plews, a research analyst at United Income, told Business Insider.
In these types of plans, most of the contributions come from the worker rather than the employer, and Americans are notoriously bad at saving money. It's fair to conclude, then, that some people may need to work longer to make up for a lack of savings come retirement age. And yet, Plews said, the data show scant savings isn't what is driving most old-age workers.
Further, the numbers show there's another, more intangible, factor at play: longevity. Improved health means Americans are feeling more capable than ever, the report found. Seventy-seven percent of over-65 workers said there are no limitations in the kind of work they can do.
More savings and retirement coverage
- How to retire early
- How to save more money
- Are CDs a good investment?
- When to save money in high-yield savings
Personal Finance Insider offers tools and calculators to help you make smart decisions with your money. We do not give investment advice or encourage you to buy or sell stocks or other financial products. What you decide to do with your money is up to you. If you take action based on one of the recommendations listed in the calculator, we get a small share of the revenue from our commerce partners.
- GST Council meet: No new tax on food delivery apps Swiggy, Zomato
- SBI, Kotak Mahindra and others cut home loan rates ahead of festive season
- Virat Kohli's T20I journey as captain is better than Dhoni's
- Gen Z decoded: MTV's latest report reflects Gen Z’s behavior patterns,mindsets, habits and perceptions
- From ecommerce to payments — here are the top funded business models of last one year