Planning for retirement in a world changed by AI

There have been plenty of unsettling headlines about Artificial Intelligence lately. Some focus on how quickly it’s developing; some ask what jobs it might replace, others cover incidents of it going ‘rogue’. But when I think about it from a financial planning perspective, I find myself looking at a different question: what might it change about the life we’re planning for?

Many of the new enquiries I get are from people in their 50s or approaching 60. They’re thinking about the future in terms of when they can retire, what they can afford to do and whether their money will last. Those questions will always carry the same weight, but when we think of the future today, we need to think about something different to the one we’re currently picturing because retirement, along with everything else, will change dramatically. 

AI can answer your question, but can it understand why you’re asking?

AI is already useful for gathering information and working through numbers, and I can see it becoming part of how financial planning operates. But the conversations I have with people tend to go well beyond the numbers.

Someone might ask if they can retire next year, help their daughter with their first deposit or spend a bit more on holidays, but underneath, there’s another question: “Are we going to be okay?” That’s why I explore that side of things further by asking questions that might not always seem numbers-related.

I need to know what they’re hoping to do, what they’re worried about and what would make them feel comfortable taking that next step. Once I’ve asked about those things, we can look at the figures together and talk through what’s possible. I think most people will still want to have that conversation with someone who knows them and will be there as things change.

There’s a practical side to this, too. I’ve asked general AI tools tax questions and had answers back that I knew were wrong. They sounded convincing enough that someone unfamiliar with the rules might have taken them at face value. The Financial Conduct Authority has also warned that these tools can give inaccurate information, and using them for advice does not come with the protections that may apply to regulated financial advice.

I’m keen to use AI where it helps me do a better job. But when I give someone advice, I’m responsible for it. After all, they’re making decisions about the rest of their lives.

How much could it change later on?

The other side of this conversation interests me just as much. AI may change some of the assumptions we make when planning for retirement, especially around independence and care.

My parents live about 40 minutes away from me. My dad is 83, and while I’m happy enough with him driving locally, I’d be less comfortable with him making the journey to our house. I own a Tesla and have been waiting years for its driving technology to develop. I can imagine a time when I could send a car to collect my parents, bring them over for the day and take them home again.

We aren’t there yet. Tesla’s current Full Self-Driving (Supervised) system still requires an attentive driver, and the UK is working through how fully automated vehicles will be approved and used. Still, the possibility matters. Losing the ability to drive can shrink someone’s world, depending on where they live. If transport becomes easier to arrange without relying on a family member, it could help people stay connected and independent for longer.

I can imagine changes at home as well. Technology may eventually help with everyday tasks or support someone who needs care. AI could also contribute to medical advances that allow us to stay active for longer. I don’t know when those developments will become widely available, what they’ll cost or how much difference they’ll actually make. However, I do think they’re worth keeping in mind when we talk about later life.

Plan for a life that will change

A plan made at 55 has to allow for a lot of unknowns. Technology is one of them, alongside health, family and everything else life brings.

We can’t know which technologies will become part of everyday life in ten or twenty years, so I wouldn’t build a retirement plan around a prediction. What we can do is work out what you want from the years ahead, make decisions based on what we know today and revisit the plan as life changes.

In the meantime, I’ll keep talking to clients about what they want to do in retirement, whether that’s travelling, spending time with family or staying independent for as long as possible. As technology develops, we can revisit their plans and see what, if anything, needs to change.