The so-called gig economy is celebrated for fostering creativity, but has its downsides. Today, more than one in three U.S. workers are freelancers — and this figure is expected to grow to 40 percent by 2020. Increasingly, workers are eschewing or supplementing the traditional “nine-to-five” career with independent or temporary work, but these gig workers face daunting challenges preparing for retirement.

This trend, commonly known as the rise of the gig economy, is fundamentally changing the way employees earn, spend, and save for retirement.

Analyzing the Financial Effects of the Gig Economy

Recently, Betterment compiled a new report on the impact of the gig economy on the future of retirement in the United States. The report highlights data from a survey of 1,000 U.S. respondents, 25 years and older and working in the gig economy. Several themes emerged regarding two categories of workers: “full-time giggers,” workers who rely primarily on the gig economy for their income and “side-hustlers,” individuals who rely on a traditional full-time job as their main source of income but supplement with a side gig economy job.

Why survey this segment of the population?

From the results, the rise of a modern gig economy may be affecting some Americans’ retirement futures in both direct and indirect ways.

Gigging Augments the Retirement Plan

For many respondents, the gig economy is replacing their retirement plan:

  • 16 percent plan to depend on gig economy jobs to supplement their retirement
  • 12 percent of side-hustlers will keep a side gig job as their main source of income after retiring from their traditional nine-to-five
  • The closer side-hustlers get to retirement age, the more likely they are to be using their gig economy job to save for retirement

The Gig Economy is a Debt Economy

Betterment’s survey found that more than half of gig economy workers turn to this new way of working for financial reasons, not just for the freedom and flexibility it provides. While retirement catch-up is part of the equation, debt plays a big role in why 81 percent of gig economy workers say they can’t afford to prioritize saving for retirement.

Being Tech-Savvy Doesn’t Translate to Finances

Giggers are tech-savvy by nature, but there’s a major disconnect when it comes to the way they’re approaching personal finances. Fifty-nine percent of respondents use a digital platform for their job, but only 19 percent use a digital platform for saving and 28 percent use one for online investing.

The full report showcases these themes and other details. Download and read, Gig Economy Workers and the Future of Retirement to get the full scoop.