Working Past 65 Is the New Retirement Plan, but Here's How AI Could Disrupt It
More middle-class Americans are counting on working past age 65 to make retirement work. Yet many are also worried that artificial intelligence (AI) could make that plan harder to achieve. A Transamerica Center for Retirement Studies report found that 45% of middle-class workers expect to work past 65 or never retire, while the same share fears AI and robotics could make their skills obsolete.
Working longer is the plan for many, but with the job market changing, where does that leave the middle class?
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Why More Middle-Class Americans Plan To Work Past 65
The report found that for many middle-class workers, 65 is no longer the target retirement age. Instead, below is when middle-class workers plan to retire (if at all).
12% plan to retire between ages 66 and 69
26% plan to retire at age 70 or older
7% don't plan to retire at all
"The reality is that life can get in the way of the best-laid plans," said Catherine Collinson, CEO and president of Transamerica Institute. "What's driving the desire to work longer is oftentimes a combination of both financial and healthy aging reasons — the wanting or needing of income or employee benefits and people wanting to stay active, have a sense of purpose or simply enjoying their work."
However, this plan to work longer doesn't always play out. Nearly half of current middle-class retirees (48%) retired sooner than planned, often due to job losses, health challenges, financial setbacks or family responsibilities.
"Extending one's working years is an aspirational goal that also involves some contingency planning," Collinson said.
How AI Could Disrupt Retirement Plans for Millions of Workers
If nearly half of retirees already left the workforce earlier than expected before the AI boom, today's workers may face an additional challenge. Rapid advances in AI are creating uncertainty around which jobs and skills will remain in demand over the next decade.
"AI is the big wrinkle in the equation for everyone — people of all ages and the middle class — because there's great uncertainty, at least at the moment, about how new technologies are transforming jobs," Collinson said. "Workers who plan to extend their careers could face challenges if their skills become outdated or their roles change substantially as new technologies reshape the workplace."
Many Workers Fear AI but Aren't Preparing for Career Changes
For workers planning to delay retirement, staying employable may become just as important as saving more money. Yet even though 45% of non-retirees are worried that AI and robotics will make their skills obsolete, fewer than half (49%) report that they are keeping their job skills up to date and only 26% said they are taking classes to learn new skills.
These are missed opportunities that can improve job security and enable workers to stay in the workforce longer.
"Re-skilling helps workers future-proof their careers," Collinson said. "Adaptability and resilience are increasingly important as technology changes the nature of work. Staying on top of trends, identifying transferable skills and learning how to use emerging technologies can help workers remain competitive and uncover new opportunities."
As with any new technology, AI offers new opportunities — but workers need to be prepared to harness them.
"We can talk about the scary possibilities of AI taking away jobs, but with this sort of innovation happening on such a massive scale, people can explore and learn the technology and find ways that they may be able to use it as part of their livelihoods," Collinson said.
How To Protect Your Career and Retirement From AI Disruption
The true impact of AI on the workforce remains to be seen, so workers should take steps now to ensure that they can have a secure retirement no matter what happens next.
"Understand the power of compounding savings and investments," Collinson said. "Today is a great day to start and even small amounts can grow significantly over time. Take it one step at a time, stay the course and keep an eye open for the resources and opportunities that are available to you."
This can include taking advantage of employer-sponsored retirement plans with matching contributions or the triple tax advantages of health savings accounts.
"There are always new opportunities popping up," Collinson said, "and it’s important to be on the lookout for them."
For middle-class workers, retirement may increasingly depend on two factors they can control today: building savings and remaining adaptable as technology reshapes the job market.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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