How Technology Could Force Some Workers Into Early Retirement Over the last two decades, technological advances have revolutionized the way people do just about everything. Automation, digitization, cloud computing and augmented reality are just a few examples of technological developments that are reshaping how individuals – and companies – operate. While technology has enabled businesses to increase efficiency in terms of cost, productivity and the use of resources, there is a downside. In certain industries these tech-driven processes are reducing the need for physical labor. That puts workers at risk for early retirement if their employers no longer need them to perform their jobs or maintaining their position isn’t cost effective. Needless to say, having to retire ahead of schedule can blast a hole in the savings employees count on to fund the years after they've stopped working. If you work in one of these categories, or something that seems related, start thinking about how you can move into a field with more potential longevity. If you're very close to retirement, focus instead on what you'd do if your job ended sooner than expected – or you are offered a buyout that you think you need to take.
Which Jobs Are Most Endangered? The tech industry is expected to grow by 2.8% in 2017 and 4.7% in 2018, according to Forrester. Although those growth projections are relatively modest, workers in certain industries should paying particular attention. Data from the Bureau of Labor Statistics (BLS) suggests that some positions are more likely than others to have a bleak hiring outlook over the next decade because of technology. Here are the top five fields that are most likely to see more workers replaced by robots in the coming years.
Mail Carrier – Postal workers have been a regular fixture of the American workforce for decades, but their position is on increasingly unstable ground. The BLS is projecting a 26% drop in hiring of mail carriers through 2024. Automation of mail sorting and processing, along with the widespread use of email and text messaging, are largely behind the downward shift. Switchboard Operator – Once upon a time, when you called a large company you’d be directed to an operator who would connect you to the person or department you needed to speak with. Today, however, more companies are relying on automated phone directories to field calls from customers. According to the BLS, employment of switchboard operators is expected to decline by 33% through 2024.
Machine Operator and Setter – Evidence of technology’s influence is readily apparent in manufacturing, where automation takes center stage at many companies. Among metal- and plastic-manufacturing-machine operators, job growth for selected positions is set to decrease by 20% to 25% over the next seven years.
Word Processor and Typist – Word processors and typists, specifically transcriptionists, should also be aware of how technology could compromise their long-term plans for saving for retirement. While the decline in growth isn’t as severe as in some of the fields already mentioned, employment is still set to shrink by 16% through 2024. The reason? More companies are turning to automated transcription programs to get the job done.
Bank Teller – Technology has caused major disruption in the banking industry, thanks to the increasing popularity of online and mobile banking. When you can deposit checks, send money to friends and family, or check your balance all from your smartphone, there may be no need to head to your local branch to see a teller. The end result is that job growth is expected to decrease by 8% through 2024.
Preparing for an Unexpected Early Retirement If you’re working in any of these industries or in a field where tech is a growing presence, taking a second look at your retirement plans may be a good idea. Expecting the best but preparing for the worst can help you keep from being caught off guard if you suddenly find yourself retiring in your 50s instead of your 60s.
Max Out Your Employer’s Retirement Plan – Pouring every penny possible into your 401(k) is a wise move if you’re worried about your timeline being thrown off course. That’s especially true if your employer offers a company match. For 2017 you can contribute $18,000 to your 401(k), along with an additional catch-up contribution of $6,000 if you’re 50 or older.
Downsize Your Expenses as Much as Possible – While you’re maxing out your retirement plan contributions, look at what you’re spending. Trimming your monthly outflow could make a difference in the standard of living you’re able to support if early retirement becomes a reality. Moving into a smaller home, eliminating as much of your debt as possible and cutting back on other household spending are options to consider if you want to streamline your budget. 6 Months to a Better Budget will help you get started.
Plan for Social Security – Social Security benefits can help to supplement your retirement saving if you must retire early, but it’s important to pay attention to the timing. While you can begin taking benefits as early as 62, your monthly benefit amount would be permanently reduced. Each year after 62 but prior to normal retirement age for your birth date will increase your benefit slightly, but not to the full amount you will get if you wait. If you can hold off applying for Social Security until age 70, you should get an 8% increase in your benefit amount.
The Bottom Line Having your job taken over by technology may not be ideal, but it doesn’t have to spell disaster for your retirement. Evaluating your plan on an ongoing basis and keeping an eye on what’s happening in your industry with regard to tech can make you better able to cope with any unexpected changes in your employment status.
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