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There are times when you listen to something and think, “Huh?”
“Don’t worry about squirreling money away for retirement in 10 or 20 years,” Elon Musk, the world’s wealthiest man, recently said on the “Moonshots with Peter Diamandis” podcast. “It won’t matter.”
The Tesla and SpaceX CEO was adamant that people like you and me shouldn’t be too concerned about socking away savings for after those paychecks grind to a halt.
“Saving for retirement will be irrelevant,” Musk said. “The services will be there to support you. You'll have the home. You'll have the healthcare. You'll have the entertainment. The way this unfolds is fundamentally impossible to predict because of self-improvement of the AI and the accelerating timeline.”
He admits it will take us all some time to adjust. “Bumps are part of it. Change always feels a bit scary, doesn't it?”
But it’s coming, he trumpets, at a “not-too-distant" point. ”Anyone can have whatever stuff they want — incredible medical care that's better than any medical care that exists today — and there will be no scarcity of goods or services.” Plus, “the best education will be available for everybody.”
I am all for the future being a better place for all of us. But pardon me if I don’t toss my retirement planning overboard on the advice of a man whose wealth could last for hundreds of generations.
Financial advisers (who are trying to help people stay afloat for merely one lifetime) largely agree.
“As far back as we can trace human civilization, there has always been some form of ‘money’ for exchanging goods, from shells and beads, to gold and silver, to today's complex and increasingly digital monetary system,” said Conor Kelly, partner and senior financial adviser at Prime Capital Financial and self-described Musk fan. “It's hard to imagine money simply disappearing in our near-term future.”
Kelly doesn’t quibble about AI's recent leap forward and its potential to reshape our world in ways we can't yet comprehend, for better and worse.
“But let's say Elon is right and our future is one of AI-driven abundance where goods and services are almost free,” he said. “Wouldn't that create an even larger focus on finite assets like real estate? AI can't create more mountains in Colorado or coastline in Florida.
“In a future of AI-driven abundance, those who continue to save and invest will be the only ones positioned to afford the things AI can’t replicate. Relying on a post-currency utopia is a high-stakes gamble, but continuing to build wealth is a strategy.”
While Musk is certainly a tech visionary, Dan Galli, a certified financial planner in Norwell, Mass., said his take on human behavior is off the mark.
“That we could have a society where you simply sit around and everything is provided for you, and no work has to be done, no effort has to be made, just seems to go against everything that makes humans function at whatever level. Period.”
Galli added, “This kind of futuristic prediction is fun, but I remember as a child being promised on ‘The Jetsons’ that I would live in a sky-rise building, drive a flying car, and be able to have phone calls where I could see the person I was talking to. Well, we're now 60 years later, and I only got one out of the three. Not planning for the future is a plan in itself, and it's a plan that very well could lead to failure.”
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“Elon Musk is now a retirement planner— cool!” joked Pam Krueger, founder and CEO of financial adviser referral service Wealthramp.
“Elon is describing something that is just real enough to help you visualize a potential easier future,” she said. “AI, robotics, and automation that will increase productivity, lower costs of things we buy and services, are already reshaping parts of the economy faster than people really expected.”
To Krueger, that’s the credible part of this argument.
But then there’s “a pretty big leap between technology that might lower costs someday and that means saving for retirement is pointless today,” she said.
“If I believe that, why not empty the 401(k) and spend it all now? Well, because Elon Musk is not me. And he’s not you. The day I turn to Elon Musk for retirement advice is the day I let a robot not only pick my retirement date, but decide how long I’m going to live.”
Krueger’s advice is simple: Appreciate the conveniences innovation provides, but build retirement security around the factors that exist today.
“Look at it this way, if the future turns out cheaper, faster, and better than expected, great — you’ll simply be even more prepared.”
Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including "Retirement Bites: A Gen X Guide to Securing Your Financial Future," "In Control at 50+: How to Succeed in the New World of Work," and "Never Too Old to Get Rich." Follow her on Bluesky and X.
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