Thriving in the Gig Economy

Thriving in the Gig Economy

Approximately 57 million Americans participate in the gig economy. While the gig economy has been around forever, the number of freelancers has increased exponentially. The need for these freelancers and side hustlers to save for retirement is greater than ever.

The gig economy, which includes independent contractors and freelancers, continues to grow rapidly. With over 57 million Americans participating in this type of work, it’s clear that the shift toward gig work is here to stay. While this model offers flexibility and good income, it also presents challenges in managing finances, particularly when it comes to retirement savings, taxes, and insurance. Fortunately, freelancers can take several proactive steps to improve their financial future.

First, gig workers should secure health insurance and consider opening a Health Savings Account (HSA). The HSA offers a tax-friendly way to save for medical expenses, and after age 65, it can serve as a retirement vehicle. Next, managing cash flow is critical, so creating and sticking to a budget is essential. Gig workers often experience fluctuating income, making it necessary to plan for lean periods and ensure consistent payments toward insurance and savings.

Retirement planning is another key area to focus on. Freelancers can benefit from retirement accounts designed for self-employed individuals, such as SEP IRAs or solo 401(k)s. These accounts allow workers to save for the future and build wealth with tax advantages. Lastly, taxes can be complicated for gig workers due to self-employment taxes and business deductions. It’s important to set aside 25-30% of each paycheck for taxes and consult a financial advisor for personalized tax planning.

By addressing these areas—insurance, budgeting, retirement savings, and taxes—gig workers can build a solid financial foundation. If you need assistance with any of these steps, the team at CTS Financial Group is ready to help you navigate the gig economy.

Check out our new piece where we examine 4 critical areas of personal finance that should be a focus for freelancers looking to get ahead. http://bit.ly/2L0puN0

Published On: June 21, 2019|Categories: Resource Center|Tags: , , , |

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This material is provided for informational purposes only. The information contained herein should not be construed as the provision of personalized investment advice. Information contained herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Past performance is no guarantee of future results. Investing in the stock market involves the risk of loss, including loss of principal invested, and may not be suitable for all investors. This material contains certain forward-looking statements which indicate future possibilities. Actual results may differ materially from the expectations portrayed in such forward-looking statements. As such, there is no guarantee that any views and opinions expressed in this material will come to pass. Additionally, this material contains information derived from third party sources. Although we believe these sources to be reliable, we make no representations as to the accuracy of any information prepared by any unaffiliated third party incorporated herein, and take no responsibility therefore. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change without prior notice. For additional information about CTS Financial Planning, Inc. and the material posted on this website, please review our Important Disclosures.

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