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By the time your parents were working, they had401(k) accountswith employer matching contributions.
Today, many Americans piece together their income through a variety ofside hustles.
So how can these workers balance the needs of the moment with their future retirement planning?
The key lies in that final word: planning.
Heres how you shouldbalance your financial life now and save for retirement later.
Work backwards, said Paul Gabrail, multi-millionaire and host of theEverything Moneyshow.
Ask yourself, what do you need in retirement?
Now that you have a target number, set a timeline.
When do you want to reach financial independence, and become work-optional?
You dont need to do the math yourself start playing with aretirement calculatorto get a sense for the numbers.
Start With Security
Its hard to plan decades ahead when youre struggling to pay this months bills.
Gig economy workers often struggle with budgeting, given the variability in their income.
Melanie Musson, personal finance expert withInsuranceProviders.com, recommends starting with an emergency fund to stabilize your finances.
Start by building a solid six months living expenses in savings.
In the lean months, you’re free to draw a little from your emergency savings if needed.
But too many gig workers then turn around and splurge in their strong months.
Balance your now and later by prioritizing savings in your good months.
Look for Painless Budget Hacks
Housing makes up the largest expense for most households.
Look for relatively painless ways to spend less, so it’s possible for you to funnel more towardretirement.
Old jobs become obsolete, as new ones emerge.
Automation and AI are only accelerating that turnover.
Whats your plan, if your side gig disappears tomorrow?
For that matter, your day job doesnt come with a guarantee either.
And that discrimination doesnt stop at generational jokes, either.
Over a fifth (22%) of workers over 50 report being pushed out of their jobs.
Plan for uncertain times ahead, because any source of income can disappear at any time.
But what about people who work a calling, ideal work that fills them withpassion and purpose?
These workers want to continue as long as they possibly can which means theyll keep earning longer.
Personally, I never want to fully retire, out of passion for what I do, added Gabrail.
Its nice to choose to work instead of having to work.
Many workers feel a golden handcuff however.
They continue doing work they dont love because it pays well, while their ideal work pays less.
Build a little passive income to supplement the paycheck from your ideal work.
It has a far greater impact on your portfolio than an equivalent crash later in your retirement.
Some retirees guard against sequence risk with a huge cash cushion.
But that leaves your cash losing value to inflation, and failing to earn a return.
Instead, postpone withdrawing much money from your nest egg by working a side hustle in retirement.
Certified Financial Planner Scott Sturgeon ofOread Wealthpointed out the many benefits.
It all comes back to doing work you love, because youll never want to stop.
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