Did You Just Become a Gig Worker? Start Saving for Retirement Now — or this Might Happen Did you just become a gig worker? Having trouble getting going on saving for retirement. Me, too. Let's walk through this issue together.

I recently became part of the wave of people leaving their jobs during the "Great Resignation," the mass exodus of workers from their regular nine-to-five jobs. We must all think the grass is greener on the other side, huh? (You and I aren't the only ones. You can find 6 million more gig workers today than a decade ago, according to a report by the ADP Research Institute.)

Though you can list off numerous advantages to gig work, it doesn't typically carry benefits. Just a handful of gig-only workers have assets in an employer-sponsored retirement plan (16%) compared to their full-time counterparts (52%), according to a Prudential survey.

I wasted no time dutifully setting up my new retirement account with a broker I've always used during the same month that I started freelancing.

But guess what?

Two months into my freelance journey, I haven't yet actually put money in the account. I'll spare you all the reasons, but most of them revolve around the unpredictability of my work and the "trying to get a business off the ground." (All of my excuses are terrible.)

Intellectually, I know that waiting to put money in a retirement account is a big mistake, and let's explore why.

Why You Should Start Saving Right Away

Even though you may worry about the unpredictability of your income, you should get started saving for retirement right away. Let's go over the reasons why.

Reason 1: If you don't get started right away, you might not get started at all.

There's something to be said for getting going on saving immediately. You gather momentum, start saving (often automatically, without thinking about it) and watch your savings grow. Oftentimes, when you put something off, you feel guilty about it and can't get started again.

Think about the projects you've set aside. Maybe you always planned to restore a car or refinish an antique piece of furniture. Has it continued to sit in your garage, maybe for years? Maybe you started stripping the varnish but couldn't get moving again — and you feel a little guilty every time you look at it?

Your retirement savings can feel that way as well. Just remember how much better you'll feel once you take some steps toward saving, kind of like that project you started but never finished.

Reason 2: You lose out on time in the market.

You know that you lose out when you wait. If you had put $6,000 into a retirement account at age 20 and assumed an 8% annual rate of return, you'd have close to $2 million when you turned 62.

If you wait till you're 40 with that same amount and that same rate of return, you'd only collect around $300,000 at that same age.

Waiting means you lose out on earning more, especially without compound interest working in your favor.

Steps to Getting a Retirement Fund Going as a Gig Worker

Intellectually, you may already know what you need to do, but sometimes breaking it down into steps makes saving for retirement more manageable.

Step 1: Give yourself a deadline.

Ideally, this deadline would start on the first day of your new career, but if you can't make that happen, give yourself a deadline. Mine is July 31, 2021. (I've put it on the calendar in big, bold letters.)

Also encourage people to hold you accountable to your deadline. You may need others to help you achieve your deadline or support you to make sure you follow through with your goals.

Step 2: Choose a broker.

Don't get tripped up by trying to decide on the "right" broker. You can find so many excellent brokers available, and a robo-advisor will do the trick if you want to keep it simple.

Nearly half of giggers invest their leftover income on a regular basis, according to Betterment. Those who do so are more likely to use self-managed funds (36%) or rely on an automated financial advising platform or tool (28%) than to meet with a wealth manager in person (20%).

Now that you know you're in good company, look for a broker that has low or no fees and small commissions. Look for no-transaction-fee mutual funds and commission-free exchange-traded funds.

Step 3: Choose your investments.

Look into all your savings options within SEP IRAs or Solo 401(k)s. Choose the best asset allocation within those plans so you have investments that reflect your risk tolerance and time horizon.

Also, don't forget to diversify by spreading out the types of funds you choose. You may want to look into a combination of the following options:

• U.S. large cap funds
• U.S. small cap
• International markets
• Emerging markets
• Natural resources
• Real estate

Step 4: Make it automatic.

Making it automatic means you don't think about missing the money. When you automate your investments, you ask your broker to automatically pull money out of your account and invest it for you. Hopefully, making it automatic means you're less likely to get in your own way. In other words, you don't have to rely on yourself every month (or trust yourself every month) to pull the money out and invest it. It just happens automatically.

A New Way to Approach Retirement

Today, more than one in three U.S. workers are freelancers, and this figure will continue to grow. As a society, with the advent of gig work, we've changed the way we earn, spend and save for retirement.

But leaving the working world can usher in a whole new level of nervousness. You no longer have an employer asking you how much you want to put into your retirement account — with a free match! — by a simple "just sign on the dotted line." You may not know how much disposable income you'll have to save. What if it's too much and you can't pay your bills?

I hear you. But you can't afford not to save for retirement.

The time is now to start saving for retirement if you've just become a gig worker. Otherwise, you might never do it.

So, with that, let me get into my account and set up a recurring contribution. Right now.

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