A study of alternative work options—like driving for Uber or Lyft or freelance copywriting—conducted by Prudential revealed that Gen Xers may be in a disproportionate amount of financial trouble compared to younger and older gig workers.
In a new paper titled Gig Economy Impact by Generation, data imply the financial wellness and retirement preparedness of this “lost generation” of 36- to 55-year-olds is concerning.
For instance, while Millennials said they choose to participate in the gig economy because of its flexibility and freedom to pursue other goals, Gen Xers said they are doing it due to circumstances beyond their control.
Further, among Millennials, Gen Xers and Baby Boomers, Gen X gig workers reported being the least satisfied with their current situation and the most interested in obtaining a traditional job.
And why wouldn’t they be? According to the study, 63 percent of Gen Xers doing gig work reported that they are struggling financially. Only 49 percent of Millennials and 32 percent of Boomers said the same.
Gen Xers were also most apt to feel that the inconsistent pay of gig work makes it difficult to stick to a budget (40 percent) and to make ends meet (37 percent).
Likely compounding their dissatisfaction, gig workers within this cohort were most often mid-career, doing nonprofessional work and living in single, relatively low-income households. They reported earning less than Boomers who participate in the gig economy ($36,300 versus $43,600) despite working more hours, too.
“Gen X gig workers seem to face the most financial wellness challenges, but do not have as much time to shift their career paths and improve their financial lives,” Jamie Kalamarides, president of Prudential Group Insurance, said in a statement. “These findings are a call to action for advisors, employers and policymakers, who collectively have the ability to help gig workers set up retirement savings plans, acquire adequate insurance coverage and develop budgets.”
Prudential suggests Millennials and Boomers may have a leg up on Gen X giggers for myriad reasons.
For one, younger workers may be better able to improve their financial security as they tend to live in households with multiple incomes, do more professional types of jobs and use better technology platforms to acquire gigs.
Meanwhile, older workers “may be better off because they had higher levels and multiple sources of income, and access to employer-sponsored benefits—and also because they tended to be married or partnered, to own their own home and to not have children under 18 years old,” Prudential supposed in its report.
Jessa Claeys is a writer, editor and graphic designer.
Circumstances are different for Gig-workers – however, these differences should not substitute as excuses. Saving 10% is always possible – whether on a Salary, Commission or a “gig.” When a worker (Gig, Boomer or Gen-X) puts away 10% at EVERY pay period, they should have PLENTY at age 65!
If all of the Gig-workers, Boomers and GenX’ers have fully funded their IRA’s each year then they have a valid claim; however, they can still save on an After-tax basis.)
Gig-workers need to realize, that saving for the future is a habit. That habit does not magically become simpler based upon the Type or Name of account. 10% is still 10%!