The New Retirement Reality: Gen Xers and Baby Boomers Embrace Side Gigs

As the traditional nine-to-five work schedule fades into the background, many Gen Xers and Baby Boomers are eagerly anticipating a retirement filled with leisure and peace. However, a troubling financial reality is emerging: a significant number of retirees are discovering that their savings may not be sufficient to support their desired lifestyle.

The Financial Wake-Up Call

Recent surveys reveal that over 40% of retired Americans are concerned that their nest eggs won’t fund their ideal retirement. This statistic translates to more than 20 million individuals grappling with financial uncertainty. Factors such as inadequate savings, inflation, and unexpected life events have left many families feeling as though they’ve merely traded one cycle of financial stress for another—this time in retirement.

Andrew Crowell, vice chairman of wealth management at D.A. Davidson, notes that the tides are shifting. More retirees are opting to remain in the workforce, with about 60% expressing a desire for a side gig to supplement their savings. “A side gig doesn’t have to be a last resort in retirement,” Crowell explains. “It can actually be an integral part of retirement planning, encouraging community engagement and keeping the mind sharp.”

Gen X’s Shifting Perceptions of Retirement

Retirement is often a time of mixed emotions. While some retirees look forward to spending time with grandchildren or traveling, others struggle to adapt to life without the structure of a job. As life expectancy increases, many are not only working longer in their primary careers but also pursuing part-time second careers.

Patrick Doherty, senior vice president at Wealth Enhancement, highlights that current retirees are staying active longer and living longer, which necessitates a larger financial cushion. “Generally, we see clients spending similarly in retirement as they did while they were working,” he states. This has led to a noticeable trend: retirees are increasingly taking on side gigs, such as substitute teaching, real estate, or serving on boards.

Interestingly, the motivations for these side gigs often extend beyond financial necessity. According to the D.A. Davidson survey, 55% of retirees with side gigs report engaging in them for mental or social benefits, while only 20% cite debt repayment as a motivator.

The Cross-Generational Shift Toward Side Gigs

The trend of pursuing side gigs is not limited to retirees. Younger generations, including Gen Z and Millennials, are also embracing this lifestyle. A recent survey found that nearly two-thirds of individuals aged 18 to 35 have either started a side gig or plan to do so for supplemental income. For many, the appeal lies not just in financial gain but in the desire to be their own boss and pursue their passions.

This entrepreneurial spirit is facilitated by technology, making it easier than ever for young people to start side gigs. From streaming video games on platforms like YouTube to selling handmade products on Etsy, the opportunities are abundant. For those who manage their side gigs wisely and prioritize saving, early retirement in financial comfort becomes a realistic goal.

The Importance of Financial Planning

As both Gen Xers and Baby Boomers navigate this new landscape, financial planning becomes crucial. Doherty emphasizes the importance of the age-old adage: “Pay ourselves first.” By contributing to retirement accounts like 401(k)s and systematically saving before discretionary spending, individuals can create a more secure financial future.

Conclusion

The evolving landscape of retirement presents both challenges and opportunities for Gen Xers and Baby Boomers. While many are waking up to the reality that their savings may not be enough, the rise of side gigs offers a viable solution. By embracing this new approach to work and financial planning, retirees can not only supplement their income but also enrich their lives in meaningful ways. As the traditional notions of retirement continue to shift, the focus on engagement, community, and financial security will play a pivotal role in shaping the golden years for millions.