A few short weeks ago, before war broke out in Iran, everyone was worried about how AI was going to affect companies, jobs and the stock market. I also heard a lot about how it may affect our children’s future careers.
The one thing I didn’t hear a lot of talk about was how it could affect our personal finances, and what we should do to prepare for the risk that AI may take parts of our jobs, alter our industries for ever and render the skills we’ve spent years building much less valuable. And most people aren’t remotely prepared for that.
We tend to think about work in fixed terms. You build a career, your income grows, you move up the hierarchy and then at some point you retire. For decades that model has underpinned how we save, invest and plan.
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But AI could break down that pattern. And it doesn’t have to replace your job completely to have an impact. It can strip out parts of your role, reduce the number of people on your team, or push down wages. It can shift demand so the work you’ve spent years mastering is valued differently, or it can devalue it completely. It may create new roles while eroding the value of the one you have.
The result is not necessarily unemployment. It’s something more concerning and in many ways more insidious and difficult to manage: unpredictable income, shorter peak earning years and more frequent transitions between roles or industries. That means more retraining and, potentially, more time on the sidelines.
And yet most of us are still managing our finances as if none of that is going to happen. We assume our income will be steady; that the skills we’ve built will continue to be valued in the same way; that our careers will progress in a fairly predictable and hierarchical line.
For a long time that was a reasonable assumption. But now I’m not sure that’s the case.
Your forties and fifties are often the years when you do the heavy lifting financially, paying down your mortgage, trying to build some momentum in your pensions and investments. You might still be supporting children too, which brings a fair bit of financial pressure. There’s a lot riding on things going to plan. And there’s not a lot of space for things to go wrong.
A drop in income at 30 is inconvenient. It delays your progress. But a drop in income at 50 can reshape your retirement entirely.
So the question you should be asking yourself isn’t, “Will AI take my job?” It’s a more practical one: “What happens to my plans, my mortgage and my retirement savings if my income becomes less certain than I expected, or my industry starts to value my skills less?” Once you look at it that way, you can work out what to do about it.
You need to build a bigger buffer. The old rule of three months’ expenses made sense in a more stable world. If your income could become patchier, 6-12 months is a much more honest target. Not because disaster is inevitable, but because time is everything when things change. It’s the difference between making a clear-headed decision and a desperate one.
You also need to stop relying on only one income stream — and I don’t mean start a side hustle. It’s about building options such as investing outside your pension, doing a bit of consulting, or developing a skill that could generate income down the track. The goal isn’t immediate money, it’s flexibility and having somewhere to turn if you need it.
You need to take your earning power seriously. We talk about savings rates and investment returns, but your ability to earn is still your biggest financial asset through midlife. If AI is reshaping your industry, keeping your skills sharp isn’t optional, it’s essential. That may mean learning how to use new tools, understanding how your role is evolving, or being willing to pivot earlier than you’d planned.
You can also become more flexible about your retirement plans. The option to dial work up or down rather than quitting for good can make you far more resilient than you realise.
Lastly, you need to keep investing, even when it feels uncomfortable. When things feel uncertain, the instinct is to pull back, sit in cash, and wait for things to settle. But stopping the habit of building long-term assets during a disruption can cause more damage than the disruption itself. The goal isn’t to take on risk recklessly. It’s to stay in the game long enough for the good years to do their work.
You need to see the risk from AI as not just losing your job, but losing momentum in your retirement plans and the life you’re building around them. It’s worth getting ahead of it now, while you still can.
Bec Wilson is Times Money’s retirement columnist and the author of How to Have an Epic Retirement