AI is raising retirement fears, but it isn’t Americans’ biggest worry.
Credit: Getty Images / Jackyenjoyphotography Key Takeaways
One-third of Americans fear AI could disrupt careers or reduce earnings before retirement, with Gen Z being the most worried.
The cost of living, healthcare, and housing are viewed as the biggest threats to retirement plans.
TIAA says workers facing income risk should protect employer-matched retirement contributions first.
Artificial intelligence is reshaping the workplace and, according to a new survey from the TIAA, adding another layer to Americans’ retirement worries. Many fear the technology could take their job or cut their pay, limiting how much they’re able to save for retirement while rising living costs are already squeezing household budgets.
Here’s what the survey found, and what one expert says workers can do now if they’re worried their income could be disrupted.
1 in 3 Americans Worry AI Could Hurt Their Earnings Before Retirement
One-third of the 1,000 Americans ages 18 to 65 surveyed by TIAA said they are extremely or very concerned that AI will disrupt their career or reduce their earning potential before they can retire comfortably. For workers still building their savings, a job loss or pay cut can mean smaller contributions to a 401(k) or other retirement account, along with lost investment growth those contributions could have earned.
Concern is highest among younger generations. Forty-two percent of Gen Z respondents say they are extremely or very concerned that AI could disrupt their career or reduce their earning potential, compared with 33% of millennials and 28% of Gen X and baby boomers.
Lower-income households are more likely to share those worries. Thirty-six percent of respondents from households earning under $75,000 are extremely or very concerned, compared with 31% of those from households earning between $75,000 and $150,000 and 27% of those from households earning more than $150,000.
Why This Matters
AI has been linked to job losses, which can affect more than a worker’s current paycheck. Lost income can mean smaller retirement contributions, missed employer matches, and less money left invested to compound over time.
The Retirement Concerns That Rank Above AI
Despite many people worrying about it, AI still ranks near the bottom of the pressures the survey tested.
Opinions are divided. Eighteen percent of respondents said the rise of AI in the workplace is a major threat to their retirement plans, while 22% view it as a minor one. Another 41% say AI is neither a threat nor an opportunity, and 19% see it as an opportunity.
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Rising costs are a broader concern. The cost of living and inflation top the list, with 51% of respondents calling them a major threat to their retirement plans. Rising healthcare costs rank next at 44%, followed by housing and homeownership costs at 37%.
Stock market volatility also ranks ahead of AI as a major perceived threat, at 22%. Career burnout, meanwhile, is about even with AI, while supporting adult children or aging parents and longer life expectancies rank below it.
What to Do if AI Threatens Your Job or Income
It’s understandable why people are worried about AI. The technology has been linked to job losses, and a lost job or reduced paycheck can mean smaller contributions, missed employer matches, and less chance to take advantage of investment growth, the main engine that helps retirement savings grow to an adequate level.
Surya Kolluri, head of the TIAA Institute, says these fears strengthen the case for building financial resilience before a disruption happens, including saving more while earnings are intact and maintaining a cash cushion outside retirement accounts.
Act Before Income Drops
“If you’re worried AI could disrupt your career before you’ve saved enough, don’t wait to find out if that fear comes true,” Kolluri says.
“Increase your contribution rate now, while you still have full earning power, and build a cash cushion outside your retirement accounts so a career disruption doesn’t force you to raid your 401(k) or IRA early. The protection has to be in place before the disruption happens, not after.”
Consider Guaranteed Lifetime Income
If your plan offers it, Kolluri also suggests opting in to guaranteed lifetime income, a type of annuity that provides regular income for life in exchange for a lump sum or multiple premiums.
“Guaranteed lifetime income is the one piece that doesn’t depend on getting the AI prediction right, because the annuity income arrives regardless,” he says.
Important
Annuities have trade-offs and Kolluri’s employer, TIAA, is a major provider of them.
Protect the Match First
If income falls and you can’t maintain previous contributions, Kolluri recommends protecting the match first. “That’s free money, and the last thing you should cut,” he says.
If you can, he adds, cut discretionary spending before reducing retirement contributions. “A shorter setback is recoverable,” he says. “A year of missed compounding is not.”
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