Throughout the past few decades, the “traditional” work environment has changed – in some cases, drastically. The 8-to-5 Monday through Friday work schedule is quickly becoming a thing of the past – at least for many people – and it is being replaced by those who want to attain the freedom and flexibility that a freelance or “gig” economy lifestyle can offer.
The Pros and Cons of Working in the “Gig” Economy
There are both advantages and drawbacks to being a freelance or gig economy worker. Some of the biggest plusses can include:
- Flexible schedule
- Work can take place from anywhere (in many cases), provided that you have a computer and an internet connection
- Pay is based on what you charge, versus what someone offers you
Along with these enticing benefits, though, can come a few potential drawbacks – one of the biggest of which is that freelancers and independent workers don’t typically have access to employer-sponsored benefits like retirement savings plans.
Because of this, it is often necessary for these individuals to set up a plan on their own. But with so many alternatives available, which ones are legitimate and which ones could lead you to financial ruin?
Retirement Income Options for Freelance and Gig Workers
Depending on your past, current, and future employment, you could have several options in place for generating income in retirement. For instance, if you have built up enough work credits, you could have monthly Social Security retirement benefits. These are paid for the remainder of your lifetime, and oftentimes, the amount of the payment will go up, based on a yearly cost of living adjustment (although this is not guaranteed).
You may also have an Individual Retirement Account (IRA) and/or personal savings through which you may generate interest or dividend income. Going this route can be somewhat tricky, though, because depending on the volatility of the stock market, you could run the risk of depleting your assets while you still need them. Likewise, if interest rates remain low, your principal may remain protected in “safe” money options like CDs, but the amount of income you generate can be painfully low.
One income generation option that many in the freelance or gig economy are turning to is the annuity. These financial vehicles can pay you a regular stream of income for a specific amount of time, such as ten or twenty years. They also typically offer a lifetime income option where cash flow will continue to arrive for the remainder of your lifetime. This, in turn, can alleviate the concern over running out of money before you “run out of time.”
Will You Be Able to Count on Reliable Income in Retirement?
If you work as a freelance or “gig” economy worker, you may have much more freedom over your time as compared to employees of companies who are required to work on a set schedule. You may also have far less support, though, when it comes to paying for healthcare needs and future retirement income.
Without an employer-sponsored retirement plan to rely on, it is necessary that you put your own strategies in place so that you can count on a regular flow of incoming cash in the future. An annuity can help you to do exactly that.
Because there are so many different types of annuities, though, it is important that you discuss your specific situation – including your risk tolerance and time frame until retirement – with an income planning specialist. That way, you will be in a better position to narrow down the right type of annuity for you (if any).
This is where Annuity Gator can come in. At Annuity Gator, our focus is on educating consumers (as well as financial professionals) on how annuities work, and how they can be used in retirement income planning.
So, if you would like to set up a time to chat with an annuity specialist, feel free to contact Annuity Gator by calling (888) 440-2468
or by sending us an email through our secure online contact form
. We look forward to showing you the options you have for future retirement income that you can count on.