By Deborah Jeanne Sergeant
If your career is winding down, you can plan now to supplement your retirement income. Thanks to the “gig economy,” many people work for themselves.
Nation1099.com estimates that about 11% of U.S. adults work full time as freelancers. But many work part-time as a freelancer or in addition to a regular job.
One of the many perks about gig work is that you choose how much or how little you care to work. The flexibility offers true freedom while still bringing in some money and keeping you as active as you’d like.
Instead of the hassle of starting your own business, try one of these easy ways to get a gig.
Sign up for ride sharing apps like Uber (www.uber.com) or Lyft (www.lyft.com) or delivery services like Grub Hub (www.grubhub.com) or Door Dash (www.doordash.com). If you have a smartphone, good driving record and a late-model vehicle in good condition, just add a friendly demeanor and you’re ready. The app allows you to choose when and where you want to drive. By maintaining good ratings with top-notch service, more business comes your way any time you’re available.
2. Mystery shopping
Also known as secret shopping, this gig involves working as a contractor for a third party hired by a business that wants an honest opinion about its goods and services. For example, a fast food restaurant wants to know if its employees are keeping the place clean, using the approved signs and uniforms, recommending additional items and overall presenting the right image. If you have a PayPal account (most pay this way), can observe and remember many details and can follow the many rules of the shop, you can get free goods and services (from oil changes to clothing to meals out) and a small stipend for your time. You can stack up several evaluations in a single day or snap them up whenever you’d like. Sign up at Sinclair (www.sinclaircustomermetrics.com), Best Mark (https://apply.bestmark.com), Market Force (www.marketforce.com/become-a-mystery-shopper) and Intelli-shop (www.intelli-shop.com/shoppers). Avoid scamming entities that ask for money upfront.
3. Selling your skills
By now, you are really good at what you do. Many websites offer an easy way to sell your knowledge as a contract worker. As with mystery shopping, don’t sign up for a site that requires money upfront. Although some provide premium membership, they at least allow participation for free. Try Guru (www.guru.com), Elance (www.elanc.com) or Upwork (www.upwork.com) for selling business, artistic, legal, writing, secretarial, sales, engineering, architectural, programming and other skills. While the people seeking workers aren’t necessarily all rock solid and paying top rates, they’re generally vetted and you can safeguard your payment by opting for secured funds paid to the site and held by them until you complete the project.
4. Selling your expertise
If you enjoy mentoring and teaching, then instructing online through Udemy (www.udemy.com) or Varsity Tutors (www.varsitytutors.com) to share your knowledge with the world.
5. Doing errands
You’re likely your family’s go-to for help because you know how to do a lot and you have the time. Why not get paid to help others? Tasks such as childcare, tutoring, personal care, cleaning, home repairs and dog walking are available at sites like Care (www.care.com) and Takl (www.takl.com).
Financial Planners: How Gig Work Affects Your Taxes
Consider how gig work affects your financial status if you’re drawing on Social Security.
Leyla Z. Morgillo is a certified financial planner and associate adviser with Madison Financial Planning Group in Syracuse. She said that if you’re not at full retirement age and you draw on Social Security, the Social Security benefit will be reduced by $1 for each $2 you earn in excess of $19,240.
“That can pretty quickly erase any Social Security benefits being received,” Morgillo said.
Starting with the month you attain your full retirement age status, your benefits will no longer be reduced, she said.
“If retirees find themselves working in a gig where they are treated as an independent contractor, one of the ways that they can help reduce their associated tax bill is to contribute to a SEP IRA,” Morgillo said. “The simplified employee pension plan (SEP) allows 1099 workers to contribute up to 20% of their net earnings from self-employment or $56,000, whichever is less, in 2019.
“One of the key features is that there is no age limit for contributing to a SEP, as long as the eligibility criteria is met, so contributions can be made even after age 70 ½.”
Once retirees are 65 and drawing on Medicare, they must make sure that their income falls below the thresholds for the surcharges for Medicare B and D premiums, as a result of the Income Related Monthly Adjustment Amount (IRMAA).
“Each person’s situation is unique and one provision does not generally apply to all,” said Lee M. Gatta, a chartered life underwriter, chartered financial consultant, accredited estate planner with Prudential Financial in DeWitt.
“Working in retirement even part time can change the taxation of income from all sources and possibly increase the rate at which their Social Security income is taxed,” Gatta added. “Gather as much information about your own benefits and ask a trusted adviser to help you determine how much additional income can be made without causing your tax bracket to creep up.”
The freelance workforce is growing at four times the rate of the workforce overall. Experienced independent professionals who can find and communicate with serious clients are the future of work.
11% of U.S. workers are full-time freelance
7 million U.S. workers will enter this group in the next 3 years
$100,000 earners are the fastest growing segment of freelancers