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Gig And Older Workers Need To Take Control Of Their Retirement



Several retirement trends have been brought into focus by the COVID-19 pandemic. One of the most disturbing is the number of workers between 50 and 65 who are in jobs without retirement benefits. Today half of all workers don’t have access to a work sponsored retirement plan.

According to a recent study by Alicia H. Munnell and her colleagues at the Center for Retirement Research at Boston College, one-fifth of American workers in the 50 to 65 cohort are in non-traditional work arrangements. Matthew S. Rutledge, also at the Center for Retirement Research, estimates that a third of that group doesn’t have health insurance or a retirement account.

Professor Munnell’s analysis revealed that fully half of older Americans in no-benefit jobs stay in those jobs for years. Only 26 percent have used no-benefit jobs as a stop-gap between full-time jobs with benefits. One intriguing statistic: 24 percent of workers in non-traditional, no-benefit jobs have college degrees or higher.

It seems likely that new work arrangements, like remote work for full-time employees, will also increase the number of non-traditional, “1099 jobs” aka Gig workers. As the pandemic realigns the labor market in the U.S., the necessity for individuals to be aware of and plan for retirement will only increase.

The potential negative economic impacts of this trend are significant: Professor Munnell estimates that workers in nontraditional jobs for the duration of their fifties and early sixties will save 26 percent less than their peers who were in full-time jobs with a 401(k) plan.

The reason why these workers, who may make a significant amount of money as freelancers or consultants, either don’t have retirement plans or under fund them is clear: independent contractors have enough on their plates without having to do the hard work of planning for retirement.

The IRS has several plans for the self-employed to save for retirement, but picking one is just the first step. After you have a plan, calculating your contributions to it to minimize your tax liability is complicated, especially if you are trying to use several different software tools to manage planning and contributions.

Possible Solutions

Decades of research into behavioral economics and finance has shown that the more complex operations become, the less likely people are to sit down and think through the implications. More often, we use mental shortcuts (called heuristics in the academic jargon) to make our decisions — sometimes with disastrous, unintended results.

Very human traits like loss-aversion, hyperbolic discounting and the endowment effect mean savers are often too conservative with investment risk but also more likely to spend the money they have; reasoning they might not have it in the future anyway (perhaps due to inflation).

The Policy Solution

Economists and policymakers have designed retirement plans to compensate for our inability to save for retirement. The first and most important of them all is still Social Security. But Social Security was designed during the height of the labor movement when workers had more leverage over their employers, and companies offered generous pensions to life-long workers.

Beginning with the Employee Retirement Income Security Act (ERISA) of 1974, the next wave of retirement policy shifted the burden of saving to individuals and away from government or business. The move has been good for asset managers and financial planners, but not, perhaps as good for individuals, especially those in non-traditional work arrangements.

The Obama administration recognized the need for a simple, government-sponsored retirement plan that would be both portable and affordable and so it created the myRA program in 2015. Unfortunately, not many people adopted the plans, and the Trump administration shut the program down in 2017.

Some states, like Oregon and Illinois, have state-level plans that are like the myRA, but as Professor Munnell told NPR, “without a mandate, without somebody saying, ‘Mr. Small Businessman, you have to do something for your employees,’ I don’t think we’re going to see much change.”

Even though a “government option” like the myRA could significantly help the growing number of non-traditional workers who don’t have strong ties to their employers, without a profound political realignment, it seems unlikely that legislation will pass any time soon.

Better Tools, More Awareness

Technology developed over the last decade based on the principles of behavioral economics has attempted to fill the gap left by politicians. You can link your bank and investment accounts to free retirement planning software that will model your retirement preparedness. And designers are building in features to help savers make better decisions intuitively.

Better technology has also lowered the cost of investing, so long as investors are smart about keeping advisors’, transaction and fund fees low. The trend toward low- to no-fee retirement products has accelerated over the last few years, and the widespread adoption of low-fee investment vehicles like ETFs has reduced the cost of investing.

The next technological innovation will capture the demand for retirement advice needed by workers in non-traditional, “1099 jobs” by making it easier and less costly to prepare for the future.

For now workers who find themselves without a work sponsored plan can create their own solution:

  1. Build a retirement plan 
  2. Save & invest regularly (ideally > 15% and over a long period of time to take advantage of dollar cost averaging)
  3. Leverage pre-tax savings vehicles such as an IRA or Solo 401K
  4. Keep investment fees low 
  5. Re-balance regularly 
  6. Engage a fee only / hourly financial advisor who is a fiduciary if you need extra help

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ALMBC launches music industry COVID-19 gig dashboard




ALMBC launches music industry COVID-19 gig dashboard

The Zoo, Brisbane / by stxdio

The Australian Live Music Business Council is helping its members negotiate COVID-19 restrictions for businesses with a new online tool.

The National Gig Ready Dashboard is available to the ALMBC’s 488 Aussie members, comprising small to medium-sized businesses around the country.

With restrictions around how to operate in the era of coronavirus seemingly in a constant state of flux, members will now be able to access up-to-date information to ensure COVID-safe compliance in any state or territory,

From current restrictions and physical distancing requirements through to the service of alcohol and even whether patrons can dance, this new tool is ready to help businesses at any stage of reopening.

There are plenty of helpful links at hand too, ready to take members to relevant state government resources.

“As the country opens back up to live music, creating tour routes and planning shows that will be COVID compliant and having advice that is up to date for every corner of the country will be essential to ensure we can take advantage of opportunities for artists, businesses and audiences,” ALMBC interim chair Stephen Wade said.

The dashboard is currently available to any small to medium-sized business in the industry, with the annual feel to join the ALMBC currently waived until January, 2021.

“Getting Australian music culture back on track is essential and we’re pleased that the ALMBC is already having real and meaningful impacts for our members,” Wade added.

The ALMBC aims to act on behalf of the ‘backstage’ voices in the music industry. Members include agents, venues and small promoters through to ticketing companies, poster companies, media, publicists, food vendors, security, music technicians, crew and many more.

Pixie Weyand, owner of Brisbane venue The Zoo and ALMBC working group member, said the past few months have been confusing for many venues.

“As a music venue, the last few months have been not just stressful, but really confusing and that’s just in one state,” she said.

“It’s really important for venues that are struggling to stay afloat that the rules are clear and easy to navigate and it’s been great that we can come together as a sector not just for support, but for information sharing.”

“Artists and bookers can now create national plans with the eight sets of rules they are working under all in one place.”

The ALMBC directly represents 28,000 employees at 488 businesses, having only just formed in July, 2020. The ALM

Head to the ALMBC website to join the ALMBC and or access the dashboard here.

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Freelance, Food Lead Gig Economy Apps Ranking




Of the seismic workforce changes that have reshaped the economy in recent years, gig work is perhaps the most meaningful. As successive disasters and economic collapses converge with digital collaboration, an entirely new breed of part-timers has emerged around gig apps.

PYMNTS’ latest Provider Ranking of Gig Economy Apps reveals the power players and those jockeying for chart position as the gig economy expands substantially post-pandemic.

The Top 5

DoorDash takes the No. 1 spot in the latest rankings on the strength of several creative COVID-era partnerships and new concepts like the DashMart mobile convenience store. At No. 2 this month is gig titan Uber Driver whose wider platform applications are proving a strength as ridesharing remains depressed. Taking the No. 3 spot is personalized grocery delivery service Instacart, followed at No. 4 by Fiverr, an online marketplace for freelance services. Rounding out this month’s Top 5 at No. 5 is Australian crowdsourcing marketplace web service Freelancer.

The Top 10

Hourly worker staffing app Snagajob snagged the No. 6 spot on the latest Provider Ranking of Gig Economy Apps, with Lyft Driver picking up the No. 7 chart position, followed by freelance marketplace Upwork at No. 8., pet car services app Rover at No. 9, and mobile order-ahead aggregator GrubHub making the cut for gig work apps by grabbing the No. 10 spot.


New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.

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Gig Worker Attacks a Big Labor Ploy – InsideSources




Uber has announced its intention to merge with Postmates, giving the ride-hailing and restaurant-delivery networking company a foothold in the growing grocery-delivery market.

Since the outbreak of pandemic COVID-19, grocery delivery has surged as travel has collapsed, so Uber saw diversification as its path to survival.

Also seeing diversification as a path to survival is Big Labor, which has, through worker centers like Working Washington — a front group for Big Labor principally funded by the Service Employees International Union (SEIU) and its local affiliates — opened an all-out offensive against the so-called “gig economy.”

Part of that economy are companies like Uber, Postmates, DoorDash, and GrubHub (to name only a few) that rely on independent contractors to deliver food from restaurants and items from stores to customers; these workers set their own schedules, contribute their own capital, and direct their own work, unlike most conventional employees.

Big Labor sees this as  a problem and are engaging in a campaign to undermine the thriving gig economy before it gets any larger.

Under federal law, unions of independent contractors cannot force contracting companies to engage in monopoly collective bargaining. So, as COVID-based restrictions on normal human life and the general consumer benefits of application-based services create growth in the sector, labor unions are going all-out to benefit themselves at the expense of consumers, independent workers, and the companies that support those workers and consumers.

Approach one is a frontal assault, most notably via legislation that characterizes independent contracting workers as true employees.

First enacted through California’s controversial Assembly Bill 5 (AB5), , this type of legislation is poised to all-but-eliminate freelance writing and content creation and owner-operator trucking in addition to the targeted “gig economy” application-based services.

At the national level, union-backed House Democrats passed the PRO Act, legislation that would make several Big Labor-empowering changes to employment law, perhaps foremost among them a nationwide expansion of California’s “classification” law under AB5.

The second approach is the old-fashioned corporate campaign, the SEIU-perfected tactic of harassing a large business into not opposing unionization on the threat of brand damage.

Leading the charge is Working Washington, the SEIU-funded activist “worker center” that fronts campaigns for the union in Washington State. Working Washington has led campaigns against DoorDash and Postmates; for good measure, the Postmates campaign also targeted Chipotle, an SEIU unionization target.

For now, the stated goals are health and safety regulations and higher guaranteed pay, but the SEIU’s ties to Working Washington indicate a clear intention to bring independent contractor delivery workers into the union as dues-paying members.

A majority of Working Washington’s board are current or former SEIU officials; Working Washington and SEIU 775NW, the union’s militant Seattle-area local, reportedly share office space.

And while adding new union members might be SEIU and Working Washington’s ultimate goal, killing the application-based model — a model that has helped keep restaurants afloat and paying workers and helped consumers tolerate otherwise-intolerable “social distancing” diktats — would also serve to increase union power.

If Instacart goes bust because it cannot operate under Big Labor’s employment model, well, then the unionized supermarkets’ in-house delivery services will prosper.

The goal of the attack on application-based services is simple: Big Labor wins; workers and consumers lose.

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