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Many freelancers and other self-employed Americans plan to continue working even after they retire — and many of them will have to because they’re not saving nearly enough to live on while retired, according to the findings of a new study recently released by the nonprofit Transamerica Center for Retirement Studies (TCRS).

“The whole idea of retirement seems to be a lot less relevant” to self-employed workers, who like the flexibility self-employment offers and being their own boss, Catherine Collinson, its CEO and president, told ThinkAdvisor on Monday.

Sixty-two percent of self-employed Americans plan to continue working while they’re retired and only 26% of the self-employed are “very much” looking forward to retirement, the study “Self-Employed: Defying and Redefining Retirement” showed.

Sixty-eight percent of the self-employed intend to work beyond age 65, including 40% who expect to retire after age 65 and 28% who don’t plan to ever retire, TCRS said.

Among the self-employed who plan to retire after age 65 and/or continue working in retirement, their reasons for doing so are more often healthy-aging related (83%) than financial (73%). The most-cited reasons were to be active (59%), keep their brain alert (56%), enjoy what they do (54%) and want the income (54%).

The number of self-employed people who plan to continue working in their retirement years was surprising, Collinson said. But she told ThinkAdvisor: “If anything, the self-employed may have a false sense of security. Given that they’re self-employed and they’re successful in what they do, they may be overly optimistic about how long they will be able to continue working or that their business will be viable, and retirement could very well come sooner than planned or expected.”

Many of them are failing to make the necessary preparations for their retirements, she noted. Although most of the self-employed are saving for retirement to some degree, all too many of them are either not saving enough or not saving at all. While 55% of them are consistently saving for retirement, 30% are only saving from time to time and a “concerning” 15% say they never save for retirement, the firm said in an announcement about the study.

Of the self-employed, 16% indicated they had either taken a loan or early withdrawal from a retirement account, Collinson also told us. Of those who said they weren’t saving for retirement, 20% indicated they had done that, she said.

Total household retirement savings among the self-employed is $71,000 (estimated median), TCRS said. But relatively few are saving in tax-advantaged retirement accounts, suggesting they may be missing out on an opportunity, it noted, adding only 31% are saving in a traditional or Roth IRA. The self-employed, meanwhile, expect diverse sources of income when they retire. Seventy percent expect income from Social Security and 54% from other savings and investments. But only 40% expect retirement income from typical retirement accounts including 401(k)s, 403(b)s or IRAs.

The analysis contained in the study on the self-employed was broken out from the company’s 19th Annual Transamerica Retirement Study, which was prepared internally by the research team at Transamerica and based on a 25-minute, online survey conducted between Oct. 26 and Dec. 11, 2018, among a nationally representative sample of 5,923 adult workers by The Harris Poll on behalf of TCRS. Of those workers, 755 people who identified themselves as self-employed were broken out for the separate study, TCRS said.

It was the first time that TCRS did a separate study on the self-employed, Collinson told ThinkAdvisor, noting her company was responding to the surging number of Americans who have become self-employed.

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