AI could be about to derail your plans to retire early, one investing pro says.
Nick Maggiulli, the chief operating officer at Ritholtz Wealth Management, has a warning for people looking to pursue Coast FIRE, a strategy in the broader Financial Independence, Retire Early movement.
It involves investors saving aggressively for retirement until their nest egg reaches a sufficient level, at which point they can stop contributing to their retirement accounts and focus solely on earning to cover living expenses.
The idea is popular among those looking to pursue other career paths and “coast” until their retirement years, but that future could be in jeopardy in a world where AI is eating away at white-collar job security, Maggiulli said.
“Regardless of how you feel about AI, maybe you should ignore Coast FIRE for now to accumulate more capital before it’s too late,” Maggiulli, whose firm manages over $7 billion in assets, wrote in a Substack post.
AI’s impact is already visible in broad-stroke numbers in the job market. Artificial intelligence was the top-cited reason for companies cutting workers last month, accounting for 25% of planned firings in March, the consultancy Challenger, Gray & Christmas said in a report.
Layoffs have also trended higher each year since 2022, the year ChatGPT first went viral.
Maggiulli added that he believes AI could “definitely” take over more white-collar jobs, though the future is uncertain. He used an example of someone who quit a more stable 9-5 to pursue coast FIRE and work as a graphic designer, only to find that work in the industry is becoming automated.
“I’m not asking you to predict the future, but you should think deeply about how you’ll earn money in a world where LLMs are even more powerful than they are today,” he said of those looking to pursue Coast FIRE.
“Why take the step back now when you could do it in a few years? After all, if AI doesn’t take your job, you’re fine. And if it does, you’ll be glad you acquired as much capital as possible while you still had the chance,” he added.
Warnings about AI’s impact on the job market have picked up as hiring has slowed over the past year. Goldman Sachs said it believed AI could impact around 300 million full-time jobs around the world.
An April report from OpenAI found that 18% of all jobs are at high short-term automation risk.
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