The Changing Work Landscape

The events in the past two years have magnified the fact that employment is in a state of flux. In 2020, millions of Americans lost their jobs, were furloughed or took early retirement. Millions more were forced to work from home, and it remains to be seen how office life will return. Other workers joined the gig economy for the first time to help make ends meet, but perhaps accelerating the move toward a freelance workforce. In fact in 2021, there were 62 million freelancers in the U.S., up from 59 million in 2020 – that’s 39% of American workers.1

Shifts in employment can have a big impact on workers’ abilities to save for the future. Here’s a closer look at some of the workplace trends that are shaping how Americans are saving for their retirement now.

  • The Gig Economy. One major shift in the work landscape has been the growth of the gig economy. More Americans than ever are working freelance gigs, running their own businesses, or relying on money-making apps like Uber to pay the bills. While being an independent contractor comes with a lot of freedom, it also means you are 100% responsible for your own retirement planning.
  • The Rise of Second Careers. Americans are living longer than ever, and many are staying fit and active well into their golden years. That’s great news. But for most people, living longer means that they’ll need to stay in the workforce longer or figure out how to support themselves through a significantly longer retirement. If you’re worried about having enough savings to last multiple decades of retirement, consider how you can boost your savings now, or continue to bring in income once you’re no longer working. Alternatively, many people are able to pick up part-time, low-commitment work for which they already have skills or qualifications.
  • The Decline of Pensions. For much of the last century, generous pension plans were a regular part of American life. After American Express created the first employer-sponsored retirement plan in the U.S., other companies quickly followed suit as a way to recruit and retain employees as corporations grew. Workers began to expect full retirement by age 65, at which point they would live comfortably on a combination of pension payments, Social Security benefits, and personal savings. Over time, companies began to see the expense of pension payments as a liability and a drag on profits. Today, only about a quarter of working Americans have a defined-benefit pension plan.

As the state of employment continues to shift, workers may wonder whether they’ll have enough savings to retire comfortably. Whether you’re a full-time employee with access to a steady paycheck and a 401(k), or you’re a freelancer with sporadic income, there are tools and strategies you can use to help ensure that you do. Developing a proper plan can help make it possible to have a wonderful and relaxing retirement – the kind you have always dreamed of.

Need help with retirement planning? We invite you to schedule a complimentary consultation with one of our financial advisors.


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