T. Rowe Price: The Majority Of Independent Workers Are Actively Saving For Retirement

Staff Report

Friday, March 29th, 2019

According to T. Rowe Price's second annual survey focused on workers participating in the gig economy, 56% of independent workers are actively saving for retirement (excluding independent workers who identify as already retired). Significantly more traditional workers are actively saving for retirement in comparison (72%). This may be due to the fact that the majority of traditional workers use their employer-sponsored retirement plan (68%) and likely have access to the automatic savings features typically available in those plans, while independent workers are primarily using IRAs (40%). Meanwhile, independent workers are just as likely as traditional workers to feel they are financially prepared for retirement (49% and 47%, respectively).

The survey also found that just over half of both independent and traditional workers envision working part time or independently in retirement.

Gig economy employment is defined as independent full- or part-time work, including temporary, freelance, and contract employment or business ownership. According to the survey findings, baby boomers make up the largest group of independent workers (48%), followed by Generation X (28%), and millennials (24%). Roughly three-quarters of all independent workers surveyed started working in the gig economy by choice and not out of necessity.


Independent workers say that working on their own has made them more involved in their finances, which is especially true with millennials. For the second consecutive year, the majority of independent workers say they are much more or somewhat more involved in their finances as a result of working independently (75%), with millennials more likely to say this (85%) compared to Gen Xers (73%) and baby boomers (71%).

Independent workers say they check their accounts more regularly, stay more on top of their bills, and work harder to have good credit since working on their own. Checking their accounts more regularly was the most cited reason independent workers say they are more involved with their finances at 68%, followed by staying on top of their bills (63%) and working harder to have good credit (33%). Millennials are significantly more likely than boomers to say they work harder to have good credit (40% and 29%, respectively).

Independent workers choose to work on their own primarily to have a flexible work schedule and be their own boss, with earning more money coming in third. Having a flexible work schedule and being my own boss were the top two reasons for working independently (60% for both), while earning more money followed at 52%.

Almost half of independent workers say they are working more than one independent job. Forty-eight percent of independent workers surveyed say they are working more than one independent job. The top two reasons for working multiple independent jobs were to maximize earnings (42%) and to pursue multiple interests or passions (36%).

"Without the safety net of being able to save for retirement through an employer-sponsored plan, independent workers have to make active decisions about their retirement," said Stuart Ritter, senior financial planner at T. Rowe Price. "So, it's encouraging to see that many of them are making the effort to save and that this proactive financial behavior extends beyond just saving for retirement. We're also seeing that many independent workers are participating in this type of work by choice. The general perception is that they are forced into this work to make ends meet financially, but in reality, their priority is to have more control of their day-to-day schedule and tasks. Work/life balance seems to be a priority for people, and working independently provides that kind of flexibility."