If you’re looking for negative commentary about your retirement prospects, you don’t need to look far, or dig too deeply. Predictions of desperation for the elderly of tomorrow, of the “crisis” that awaits them, are everywhere. And they’re utter nonsense.
How you know this firstly is that the elderly of tomorrow are the people, and the people are the market. These blanket predictions of “retirement crisis” ahead presume not that one or thousands of outliers will reach their proverbial golden years with too little in reserve, but that retirees broadly will reach the end of their working years with insufficient funds.
Unfortunately, but also happily, such alarmism presumes ferocious stupidity in the marketplace. That’s unlikely. Markets are but a routine collision of infinite knowledge and decisions made with that knowledge. To pretend that tomorrow’s elderly don’t know what self-proclaimed retirement experts claim to know about them and their future financial circumstances is quite a bit more than a reach.
Furthermore, there’s obvious danger in analyzing broad swathes of the marketplace in the present, all based on how things were in the past. Which is what retirement experts are doing. There’s the error in their analysis. Neither human beings, nor prices, nor work is static in nature. This is important.
If humans, prices and work were in fact static, the experts might have a point. Indeed, they might be onto something assuming tomorrow were going to be like today. Except that it won’t be, and the happy fact that it won’t can be found in the seeming savings shortfall that allegedly imperils retirement.
Take for instance the ongoing proliferation of “AI” and other forms of automation. To be fair, AI is realistically as old as work is. Technology is just another way of saying that man relentlessly pursues the replacement of man by machine. Thank goodness for that.
While we humans are limited by the need for sleep and the frailty of our own bodies, machines can go all day and every day. Stop and imagine the impact of more and more machines replacing human hands in the workplace. What it signals for the consumers of tomorrow is that so much of life’s necessities and luxuries will be ours for the taking at prices that continue to plummet.
Consider the above through the prism of money. No one buys things with money, rather money is the agreement about value among producers that allows us to exchange the value of our own work for all the things we need. Looking into the future, feverish automation will drastically shrink the number of work hours and minutes necessary for us to get what we need. In short, retirement experts are modeling the past, and expressing pessimism about what dollars will exchange for in the future based on the past. This is highly erroneous.
How we know it’s erroneous can be found yet again in the purported lack of savings for tomorrow’s retirees. To say that they don’t have enough yet again presumes markets are stupid. They’re not. The fact that those nearing retirement perhaps have dollars in savings that are seemingly insufficient is in reality a bullish market signal that the price of everything is poised to drop.
From there, stop and consider work itself. Quite unlike the work of the past, the work of the present is more and more a reflection of the unique skills and intelligence of those doing it. This too is a crucial market signal, one that can similarly be deduced from a relative lack of retirement savings. From the latter we can gather that tomorrow’s retirees don’t plan to cease working nearly as early as retirees of the past.
All of which brings us back to AI, or more simply, technology. The speculation by those closest to the technology is that “AI” has the potential to perform 80% of the work of 80% of the jobs in existence today. Which is a loud market signal, one that promises to have profound implications for retirement. As in it will delay it even more. Think about it.
If machines can increasingly shoulder the load for humans, by extension humans will find themselves working exponentially more productively while exerting themselves exponentially less. Yet another sign that those facing retirement in the not-too-distant future will interact with “retirement” in ways wildly different from the past. Translated, automation sets the stage for the gradual erasure of retirement as the desired or required endpoint to work.
Basically the pessimists are all wrong. The markets mock their retirement pessimism. Write it down. There is no retirement crisis.
