Hourly, Gig Workers’ Retirement Confidence Shakes

Often deprived of the same mechanisms that salaried workers use to save for their future, non-salaried workers cite significantly lower employee-sponsored retirement plan account values than their counterparts, according to a new report from Escalent’s Cogent Syndicated.

Mean ESRP account values were highest among salaried workers ($222,000), compared with the figures cited by gig workers—defined as those paid “per project” ($176,000)—and hourly workers ($123,000). The report suggested the disparity derives not only from a lack of access to plans, but from a lack of guidance and education.

“If you’re an hourly or gig worker, you may not have access to the breadth of education and investment guidance that salaried employees often benefit from,” said Sonia Davis, lead report author and senior product director in Escalent’s Cogent Syndicated division, in a statement. “This presents a significant opportunity for plan providers to offer more tailored and equanimous offerings to bridge the gap in mean ESRP account values.”

In addition, salaried workers are more confident (41%) than hourly workers (35%) in their ability to achieve their stated retirement goals. Hourly workers and gig workers are likewise more fearful of losing money (52% and 51%, respectively) than are salaried employees (46%). At the same time, one quarter of gig workers reported struggling to know what types of investment products to select and to determine their ideal contribution rates, compared to only one-fifth of salaried employees.

Meanwhile, Cogent found that beyond higher employer-matching contributions—the top way all three groups of employees surveyed would like their current plan contribution levels boosted—personalized retirement savings projections/targets are influential to more than one-quarter of both salaried (27%) and gig workers (26%). Automatic contribution escalation with an opt-out and enhanced digital capabilities were also of interest to all three groups.

What Plan Sponsors Can Do

Plan sponsors have a “vast opportunity” to provide guidance and support to their plan participants, the Cogent report stated.

One main issue to address is that some gig workers may underreport their earnings for income tax of Social Security purposes, possible due to a desire or need to optimize their current compensation, according to a policy paper the American Academy of Actuaries published this month.

Employers can improve gig workers’ Social Security benefits by “educating, facilitating and encouraging workers to fully report income, incentivizing automatic reporting and modifying the Social Security benefit formula to enhance their benefits,” the American Academy stated.

The policy piece also raised the concern that many employers who use gig workers cannot—or do not—make their retirement programs and financial education resources available to them.

“Although other non-employer-based savings options are available (e.g., individual retirement accounts), additional mechanisms are needed to promote convenient and effective savings by gig workers (e.g., arrangements that provide automatic contributions based on regular compensation deductions for retirement savings),” the paper explained. “It is also important to increase the accessibility of employer-based retirement programs for gig workers who also have a traditional job, as compensation from the traditional job may not provide an adequate base for retirement savings.”

State IRA Programs

Gig workers can also utilize state-facilitated automatic individual retirement account programs, the paper suggested. Massachusetts Governor Maura Healey signed the state’s auto-IRA program into law in July, making Massachusetts the 18th state that will have one.

“Recent state-based portable benefits legislation represents a promising approach to addressing the challenge of retirement savings for gig workers,” the paper stated. “Utah’s SB 233, for instance, offers a viable model that allows voluntary contributions from employers to worker-controlled benefit plans, ensuring portability across different jobs.”

The 2025 DC Participant Planscape report was based on a web survey, conducted from June 11 through June 27, of 4,012 DC plan participants with a current and/or former plan. Each participant was an adult that reported contributing at least 1% to a current plan and/or have $5,000 or more in at least one former plan.