A recent study by McKinsey Global Institute examined how robotics will affect labor and the economy. The study estimated that 800 million jobs (1/5 of all jobs) will be impacted by advances in robotics. (1)
Among the jobs most impacted include brokers, accountants, office staff, machine operators, and food service. Lower skilled, repetitive tasks are most likely to be replaced.
What does this mean for family finances in the years to come?
Jobs that require human interaction and creativity will be safer from robotic replacement. Education and flexibility in learning skills will give people an advantage in maintaining financial security. It will be crucial that everyone have the ability and drive to be more dynamic and more proactive in their vision of what they are able to do. (2)
According to McKinsey, “Workers with the most sophisticated digital skills are in such high demand that they command wages far above the national average. Meanwhile, there is a growing opportunity cost for the organizations and individuals that fall behind.” (3)
In addition, many people are working multiple jobs or “gigs” to bring home the same income of a pre-Great Recession W2 job. Many are becoming contractors or self-employed, many not by choice, and this requires a new outlook and mindset they are not prepared for.
Drawing a line in the sand and not pursuing new skills and opportunities will result in a reduced quality of life and compromised financial insecurity.
What does this mean for retirement planning in the years to come?
You will need to consciously set aside more money into savings? More Companies are eliminating employee benefits. History has shown that Employees that do not have a company 401k are not likely to save for retirement, and this sets up millions of people for a dangerous situation.
People that experience multiple job changes in short periods of time tend to cash out their 401k to transition to their next job. They also tend to be slow in setting up new retirement strategies.
What does this mean about protection strategies like life insurance and disability insurance?
Again, if people are changing jobs, if companies are cutting back on employee benefits, if government programs are getting trimmed due to budget deficits… for all these reasons individuals need to act on their own behalf to set up protection plans using individual life and disability insurance. Protect your family from the potential disasters that could cripple them for the rest of their lives.
Technology is changing the economy and it is an irrepressible force. Laws will not delay the change. It is critical that people understand the change that is coming and become better prepared and enabled to succeed.
Take control of your family’s financial future, do not leave it to corporate decision makers. Develop your ability to learn new skills. Save more for retirement. Manage and reduce risk. Build and maintain liquid savings. Set up life and disability insurance outside of group plans.
If you want to discuss this in more detail, please contact me.
Retirement Income. Tax Efficient Planning.
Life Insurance. Disability Insurance
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