The rapidly-expanding “gig economy” of contracted and temporary employment options presents a number of opportunities and challenges that is laid out in a new report by BMO Wealth Management entitled “The Gig Economy: Achieving Financial Wellness with Confidence.” A survey of 1,021 self-employed Americans aged 18 and older found that different generations hold different outlooks while sharing common barriers and benefits.
The top reasons for taking gig work, across every age group, are to make extra money on the side, balance the needs of family and career, and to have greater autonomy and control. 69% of respondents stated that a lack of benefits is the biggest downside, while 43% said they weren’t earning enough, 41% stated a lack of profitability, and 27% responded with accumulating debt.
The similarities between age groups end there, however. Millennials are much more likely to take on gig work for extra money than boomers, with 58% versus 49%, and gen-Xers occupying a middle ground between the two. The majority of gen-Xers and boomers instead take on gig work for greater life balance, with 55% and 52% respectively.
Most notable is that a good portion of boomers, about 34%, said that gig work was their only way to make income. Only 20% of millennials reported a similar predicament. No matter the age group, BMO says that gig workers should plan for their business, spending, and financials, maintain organization, and save up for other goals like retirement accounts.
“There are obviously tremendous advantages for gig workers of all ages, from flexibility, personal growth and providing supplemental income, but giving up a steady paycheck and employer-based retirement plans for less consistent income requires additional time and planning in order to achieve financial health,” said Tania Slade, the National Head of Wealth Planning at BMO Wealth Management (U.S.) in a press statement.
