Scientific Opinion Poll: Freelancers Need Flexible Retirement Options
New poll finds freelancers doing well overall financially but many are not able to save for retirement; support portable retirement vehicles that address the flexible nature of their work
Washington, DC—A scientific opinion poll released today shows that while the majority of self-employed entrepreneurs report they are doing relatively well financially, nearly half lack a retirement plan and more than one third say they do not make enough money to save for their future. Freelancers’ work is often intermittent by nature so they need benefits that help address their unique financial situation. This explains why the vast majority support portable retirement plans that can be carried across employers and accommodate infrequent contributions.
The internet poll, conducted by Greenberg Quinlan Rosner Research on behalf of Small Business Majority, found 53 percent of freelancers, contractors and temporary employees say they are doing well financially, while 32 percent report they are doing “just okay.” Nearly half (48 percent) earn at least $50,000 per year contracting or freelancing.
And yet, the relative financial stability most freelancers have achieved seems to apply only to the short term as 4 in 10 self-employed entrepreneurs do not have an active, formal retirement plan. What’s more, among those who do not have a plan, 38 percent say it’s because they do not generate enough income to save and 31 percent say it is difficult to put money aside because their income stream is unpredictable.
“Saving for retirement is a challenge for most Americans, but that is particularly true of solo entrepreneurs” said Small Business Majority Founder & CEO John Arensmeyer. “Even when freelancers are making a steady income, they still have difficulty planning for their golden years. It’s clear that they need assistance, and one solution to this problem is retirement plans that are both portable and flexible.”
Additionally, the poll found that losing employer-sponsored benefits gave freelancers pause when they considered becoming contractors: More than half of freelancers (52 percent) say the lack of an employer-sponsored retirement plan was a concern when they weighed the decision to become a solo entrepreneur.
“In my nine years as a freelancer I’ve learned that I have to be judicious about how I spend money,” said Steven DeMaio, a freelance editor and writer in New York City. “On top of normal business expenses, I have to set aside funds for things that would normally be covered by employer contributions, including healthcare costs and retirement savings. While I’m lucky enough to have some retirement savings, many independent contractors don’t have that luxury. With that in mind, I think portable retirement savings plans provide useful options for freelancers who need alternatives.”
The small business owners surveyed would support a range of solutions to ease retirement-saving anxiety: Nearly 8 in 10 say they are interested in a flexible retirement savings plan that is portable across employers and can accommodate intermittent contributions. And 83 percent say a plan that allows contributors to withdraw without penalty in order to increase their financial flexibility would make them more likely to save for retirement. Other plans that would make solo entrepreneurs more likely to save for retirement include automatic investment features, such as the ability to adjust investments based on age (74 percent), and a plan that includes an automated streamlined process to contribute to a retirement plan during the process of paying quarterly taxes (72 percent).
The survey reflects a poll of 500 contractors, freelancers and temporary employees. The margin of error is +/-4.4 percent.
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About Small Business Majority
Small Business Majority was founded and is run by small business owners to focus on solving the biggest problems facing small businesses today. Since 2005, we have actively engaged small business owners and policymakers in support of public policy solutions, and have delivered information and resources to entrepreneurs that promote small business growth and drive a strong economy. We regularly engage our network of 50,000 small business owners, along with a formal strategic partnership program of more than 150 business organizations, enabling us to reach more than 500,000 entrepreneurs. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers, including access to capital, taxes, healthcare, retirement, entrepreneurship and workforce development. Learn more about us on our website and follow us on Twitter, Facebook and Instagram.