Robinhood launches retirement benefits for gig workers

Robinhood launches retirement benefits for gig workers

Brokerage platform Robinhood launched a new retirement product aimed at helping gig workers at Grubhub, Taskrabbit and Gopuff save for their future.

With the new Robinhood Retirement For Independent Workers product, workers at those companies will get a range of services, as well as a matching incentive, to aid their retirement savings.

Through the program, the gig workers will get an investment match ranging from 1-3% for the first year, as well as unlimited access to one-on-one financial counseling by phone from GreenPath Financial Wellness, Robinhood said. 

While the initiative starts with these three companies, Robinhood said it expects to add additional partners to the program in the future. 

Robinhood’s announcement comes as anxiety about retirement security is climbing. New research from the National Institute on Retirement Security shows 79% of Americans feel there is a retirement crisis, up from 67% in 2020; and 55% worry they cannot achieve financial security in retirement.  

Not all workers have access to retirement-savings accounts, and not all who have access participate in them, but investment giants Fidelity and Vanguard have reported positive trends among retirement investors. 

In January, 2023, the company fully launched its Robinhood Retirement service, which is open to anyone. This new product, which offers a boosted matching program and financial counseling, is aimed at gig workers of those partner companies.

“Robinhood Retirement For Independent Workers brings us closer to our goal of giving everyone the financial tools they need to invest in their futures. Together with our first partners Gopuff, Grubhub, and Taskrabbit, Robinhood will now be able to offer a path to retirement savings for people who don’t have access to traditional retirement accounts or corporate matching programs,” said Steven Quirk, Chief Brokerage Officer of Robinhood.

Pew Charitable Trust found lack of access to a workplace plan is the most significant retirement savings challenge facing nontraditional workers, with 77% saying they would participate in a defined contribution savings plan if they were eligible for it. 

Robinhood said it has had good success with the Robinhood Retirement product so far: with nearly 500,000 funded accounts and $1.7 billion in assets under custody. The feature for independent works is “a natural next step for us in the retirement space,” Quirk said.

More people are moving away from traditional jobs to freelancing and side hustles to make a living. As of 2023, 73.3 million freelancers or gig workers are estimated to work in the U.S., according to Statista. That compares to about 57.3 million people before the pandemic, according to Gallup and Statista.

More than half (53%) of gig workers consider their work to have a negative impact on their access to retirement and savings plans. Additionally, 45% don’t expect to retire before 65 and 30% never expect to retire, according to research from Legal & General Group PLC.

“Amid an uncertain economic climate, it’s become more difficult for Americans to save and plan for their futures,” said Daniel Folkman, senior vice president of business Gopuff. “So, as we continue to invest in and enhance the delivery partner experience, we’re proud to be among the first companies working with Robinhood to bring Gopuff delivery partners access to important retirement planning tools so they can improve their financial well-being.” 

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