Like stocks, bonds and mutual funds, participating in the “gig economy,” creating a “side hustle,” or starting a “microenterprise” should be considered part of a long-term financial plan for the retirement years. Earning an income during the traditional retirement years, usually through part-time, flexible jobs and self-employment, has become the fourth pillar of retirement. The other three pillars are Social Security, a 401(k) or pension, and personal savings.

The gig economy is largely associated with Uber and Lyft, the drive sharing services, Airbnb, renting out rooms in your home to visitors, and similar companies. You use your car, your home or your skills to make some money on the side.

The gig economy gets all the attention these days, but it’s a small part of the much larger side hustle economy. Think playing in a wedding band and restoring furniture on the weekends. About a third of workers have a side hustle, according to a CareerBuilder survey from last year. These moonlighting jobs are a creative outlet for many and bring in extra income.

The retirement years increasingly involve earning an income. The transition from a career into retirement can include phased retirement with the same employer, returning to work with the same employer (full-time or part-time), a shift to bridge jobs (including self-employment) and returning to the labor force after a spell of not working.

Some people shift from for-profit companies and professional occupations to work in the nonprofit sector. In most cases, flexibility is a big attraction of gig economy and side hustle work.

For many, staying attached to the labor market offers a routine, purpose and community. A paycheck also helps. The financial services company Fidelity estimates that the average 65-year-old couple on Medicare can expect to spend $260,000 out of pocket on their health care. The Fidelity calculation doesn’t include the cost of long-term care, such as a stay in a nursing home.

When it’s time to get serious about preparing for the prospect of retirement, I would start testing out various options for turning a passion or a skill into flexible, part-time income. Tap into your most valuable asset, your network of family, friends, former colleagues and neighbors to see what insights they have for you for generating both meaning and money in the next stage of life.

The transition to flexible work is a time for experimenting to see what works and, just as importantly, what doesn’t work for you.


Chris Farrell is senior economics contributor, “Marketplace,” commentator, Minnesota Public Radio.