Insights

Over the past couple of years, AI has exploded onto the scene with the potential to significantly boost productivity and transform the way we operate. This development brings immense excitement and opportunity, but it also introduces considerable professional risk and, in our view, a heightened urgency for those within reach to achieve work optionality sooner.

The AI Revolution: Transforming Work

While we are not quite there today, it doesn’t take much imagination to envision a not-too-distant future where AI assists professionals in completing tasks, running calculations, conducting research, coding software, and more. This scenario is reminiscent of the movie Hidden Figures, where human “calculators” performed complex equations manually. In the near future, many coding functions may be viewed through a similar “old school” lens as AI takes over these tasks. Ideally, this would free up workers to engage in new projects and advancements with this added capability, though it will also create significant disruption, causing professionals to reinvest in themselves, often later in their careers.

Are You 5 Years from Work Optionality or 10+ Years?

We think it is prudent to categorize professionals into two groups: those who are 5 years from work optionality and those who are 10 years or more.

For the 5 years group, there is a high probability that AI will be assisting with much of the task-related work but not yet leading. This likely means that workers will be provided with added capacity to spend time on more strategic tasks with the goal of unlocking productivity. This will require creativity to pivot and reinvest one’s value proposition, though it likely will not lead to massive reductions in the workforce. For those within an arm’s length of achieving work optionality, this may serve as motivation to get there faster to avoid this retraining exercise.

For the 10+ years group, there is the potential to see massive disruption in terms of how we utilize AI in our society and what that means for professions. Rather than a scenario where a scientific research lead can utilize AI as a team of hundreds of graduate students to complete research and analysis to further their projects, it could be a scenario where the AI can perform better than the research lead in determining what projects to pursue, where to allocate resources, and what to have these graduate students work on. This could lead to an incredibly wide range of outcomes for what the environment can look like for working professionals at this time. For those in this work optionality time horizon, we believe there is an urgency to achieve work optionality quickly to have more financial resilience to deal with the wide range of possible outcomes.

Additional Risks and Opportunities

For the work optionality within 5 years group, there is also a near-term scenario where the extra capacity produced by AI leads to a focus on leaner organizations and more profitable companies, driven by white-collar layoffs as AI replicates many tasks more efficiently. This could result in strong investment performance from these improved bottom line figures, though it could also create a scenario where jobs are more at risk if company leaders focus on efficiency over growth.

The CEO of Anthropic recently acknowledged that while early AI coding assistants have not been very helpful to advanced coders previously, recent versions have made significant strides. To demonstrate how quickly AI is evolving, he noted that for general computer programming tasks, AI has gone from being able to handle only 3% of tasks in January 2024 to 50% currently, and it is expected to reach close to 100% within another year. By 2026, AI systems may be able to write the general code that coders currently do.

How to Quickly Achieve Work Optionality

The key to achieving work optionality all comes down to intentionality. It goes beyond working hard to earn more money; it comes down to having those hard-earned dollars work as hard as you do. This means being intentional about your career, having a savings goal that allows you to enjoy what gives you utility without spending in excess, making sure you are saving in a way that provides the most tax advantages (keep more of what you earn!), and investing in a way that best aligns with your goals and time horizon.

Plan for Financial Independence

Plan for your financial independence by working with a Certified Financial Planner to create a robust plan that strives to help you achieve work optionality. The goal is to help you mitigate the risks associated with AI advancements and strengthen your financial future. While AI presents both opportunities and risks, achieving work optionality can help mitigate the uncertainties.

For personalized advice that aims to help you keep your retirement on track, schedule a free financial check-up with one of our Certified Financial Planners! Start planning now for your financial future.

Contact Us:

team@stablerwm.com | (425) 646-6327

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

Securities and financial planning services provided through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.