Even if you support yourself through gig work, meaning you make income through a non-traditional route such as being an independent contractor or a temporary worker rather than a traditional 9-5 job, you still need to save for your retirement. But that can be tough when you don't have access to a 401(k) or some other employer-sponsored plan

Fortunately, there are plenty of ways gig workers can invest for retirement.

Note that if you're surviving on gig work because you've lost your job, you may not have much -- or anything -- to invest right now. That's OK -- staying up-to-date on your bills is more important.

But if you're a gig worker who can afford to invest right now, here are six smart ways to grow your nest egg.

A young man wearing pajama pants works from home at his kitchen counter.

Image source: Getty Images.

1. Roth IRA

A Roth IRA is one of the simplest ways to save for retirement, whether you have a regular job or you earn a living through gig work or self-employment

Income limits: To contribute to a Roth IRA, you need to earn income, but not more than the Roth IRA income limits.

Contribution limits: The Roth IRA contribution limits are $6,000 for both 2020 and 2021 if you're under 50. People 50 and older can make an extra $1,000 in catch-up contributions.

Tax advantages: One of the major benefits of a Roth IRA are the tax advantages. You don't get an upfront tax deduction for contributing to a Roth IRA, but assuming you withdraw your earnings after age 59 1/2, they're all yours tax-free, as long as you've had the account for five years or more.

You can access your contributions at any time without taxes or a penalty.

2. Traditional IRA

A traditional IRA is a good option if you earn more than the Roth IRA income limit or if you want to deduct your contributions earlier than age 59 1/2.

Income limits: There are no traditional IRA income limits, but you may not be able to deduct your contributions if you or your spouse are covered by a workplace plan.

Deduction limits: The amount you can deduct from an IRA if you have an employer plan begins to phase out at $65,000 in 2020 and $66,000 in 2021 if you're a single filer. If you're married and filing jointly, your deduction starts to phase out if your combined income reaches $104,000 for 2020 or $105,000 for 2021 if either spouse has an employer plan.

3. Solo 401(k)

If you're a self-employed gig worker or you have a small business with no employees other than your spouse, a Solo 401(k) can be an easy option for retirement planning. It's similar to a regular 401(k) plan, but you make contributions on behalf of both the employee and the employer. 

Tax advantages: You can make the deferral pre-tax like a traditional 401(k) to get the tax savings now, or opt for a Roth Solo 401(k) to get the tax-free money in retirement.

Contributing as an employee: In 2021 you can defer up to $19,500 of the salary you earn as an employee, plus you can make an extra $6,500 in catch-up contributions if you're 50 or older. However, you can't contribute more than your compensation.

Contributing as an employer: You can also contribute on the employer side. Your contributions can't exceed 25% of your net self-employment income, which is your earnings minus business expenses, half of self-employment taxes, and the money you're contributing to your Solo 401(k) on the employer's side.

Contribution limits: Overall contributions for Solo 401(k)s can't exceed $58,000 if you're under 50 in 2021, or $64,500 if you're 50 or older.

These contribution limits apply across all 401(k) plans you have. If you're a gig worker who has a regular job with an employer-sponsored 401(k) plan, contributions across your plans can't exceed $58,000, or $64,500 if you're at least 50.

Due to the high limits, a Solo 401(k) is a good option for high-paid gig workers seeking to maximize their retirement contributions.


A simplified employee pension (SEP) IRA is another way to save for retirement if you're a gig worker. All contributions you make are as the employer rather than as the employee. Employees aren't allowed to contribute to a SEP IRA, which is why there are no catch-up contributions.

Contribution limits: In 2021, the maximum contribution to a SEP IRA is 25% of your earnings, up to a maximum of $58,000. There's no Roth option for a SEP IRA, so your withdrawals will be taxed.

However, there's a kicker if you grow your hustle into a business with other people on the payroll: You have to make all employees eligible if they're at least 21, have worked for you at any point in three of the past five years, and earn at least $650 in 2021.

You'll have to contribute the same salary percentage for all eligible employees. That means if you're contributing 20% toward your own retirement, you have to kick in 20% for each employee who meets the requirements as well.

For this reason, a SEP IRA can be good if you're self-employed, but if you're planning to turn your gig work into a full-fledged business with employees you may want to think again.


The "SIMPLE" in SIMPLE IRA stands for "Savings Incentive Match PLan for Employees." You can invest in one if you're a gig worker or if you're a small business owner with 100 or fewer employees.

Contribution limits: The SIMPLE IRA contribution limits aren't quite as generous as they are for a Solo 401(k) or a SEP IRA.

In 2021, you can contribute up to $13,500 if you're under 50, or $16,500 if you're 50 or older.

There's no Roth option, so you'll be taxed upon withdrawal. There's also a steep penalty if you need to withdraw your SIMPLE IRA funds within two years of setting up the account: 25%, instead of the usual amount, on top of taxes.

As the employer, you'll have to contribute to your SIMPLE IRA on your own behalf, as well as for any employee who's earned at least $5,000 in at least two of the past five years and expects to earn at least that much for the current year. You'll have to choose one of the following formulas:

  • Automatically contribute 2%. 
  • Match 3% of contributions dollar for dollar.

Due to the lower limits and the extra layer of rules, a Solo 401(k) or SEP IRA is typically a better option for solo gig workers. However, if you expand and add others to the payroll, a SIMPLE IRA may be a good option.

6. Taxable Brokerage Account

If you've exhausted your other retirement savings options or you want the flexibility to invest with fewer rules, a plain old taxable brokerage account works. Since you won't get any tax breaks for investing in a brokerage account, though, aim to max out your Roth IRA or traditional IRA contribution before you go this route.