Understanding the Gig Economy

Many Americans have embraced by-the-job, or gig work to the point that an entire economy has evolved — the Gig Economy. The growth of the Gig Economy has been fueled by websites and apps that make it easy for service providers to connect with potential customers — sites like Etsy, Rover.com, Airbnb and Lyft. According to a report out by Betterment, 40 percent of U.S. workers will be engaged in some kind of gig work by 2020.

Hustle-up Your Retirement with a Side Hustle

If these opportunities interest you but you're not ready to retire from your day job, then part-time gig work, also known as a side hustle, might be a good option. Not only can you spend some time doing something that interests you, but you can earn extra income doing it. And, if you save what you earn, your side hustle could just help move up your nine-to-five retirement date.

You wouldn't be alone; 76 percent of side hustlers who were over age 55 were using their gig income to boost their nest egg. Having a side hustle can help you transition into retirement, by providing structure and delaying when and to what extent you draw down your retirement savings.

Gig-work During Retirement

There are both benefits and drawbacks to working in retirement. It's important to weigh both when you decide if, and how much, to work in retirement.

Ideally, if you're working in retirement it's because you want to, not because you have to. Working helps you stay mentally and physically active. Regardless of why you work, we recommend to find gig work that you genuinely enjoy doing. Many people find it rewarding to continue using their professional skills as a consultant, others might enjoy work as a handyman, dog-walker, tutor or tour guide. Whatever your interest, chances are you can find gig work to match.

And then there are financial benefits, of course. The extra income can help you delay retirement withdrawals, fill the health care gap prior to Medicare eligibility or serve as your "fun money fund."

The Down-sides of a Side-hustle

Now on to the not-so-fun part of part time work in retirement: It can complicate your finances, especially your tax planning. Social Security benefits are taxable based on your provisional income. If you are near the top of the bracket for income, capital gains or social security tax, it is especially important to monitor how much earned income you add so you don’t move up a bracket.

Earned income can also impact your future Medicare premiums, which are based on your IRS tax return from two years prior. So, if you become eligible for Medicare in 2019, your 2017 tax return will be used to calculate your Medicare premium.

One final thing to note, gig-work is self-employment and that means you don’t have an employer withholding income tax from your paychecks. Be sure to set aside some of your income, around 20 percent depending on your state’s income tax rate and your tax bracket, so you can pay Uncle Sam at tax time.


As with so many things related to retirement, figuring out whether part-time work makes sense for you can be complicated. Be sure to talk with a financial adviser or tax specialist to help you figure out the best way to work towards your goals.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations.

This article originally appeared in Pioneer Press on July 27, 2019. You may view the article here.

Bruce Helmer

Bruce Helmer

Co-Founder, Financial Advisor and Author, Speaker and Host of the "Your Money" Radio Show

Series 7 & 63 Securities Registrations,1 Series 66 Advisory Registration, † Insurance License Bruce has been in the financial services industry since 1983 and is one of the founders of Wealth Enhancement Group. Since 1997, he has hosted the “Your Money” radio show, a weekly program that focuses on delivering financial advice in a straightforward, jargon-free manner. Bruce also hosts with the "Mid-Morning" crew on WCCO-TV each Tuesday morning to...Read More