When the richest man in the world tells ordinary people not to worry about saving for retirement, it is worth asking: is this visionary advice, reckless optimism, or something in between?
Elon musk has recently stated ‘Don’t worry about squirreling money away for retirement in 10 or 20 years. It won’t matter’. Understandably this has caused some concerns and confusion among many of the public, but what did he mean by it, and should we bother to save anymore and just live for today instead?
Musk is describing a future of extreme technological abundance driven by three converging forces:
- AI that surpasses all human intelligence combined (he expects this around 2030 or soon after).
- Humanoid robots that will eventually outnumber people and perform almost all physical labour.
- Abundant, ultra-cheap energy (from solar/nuclear, etc.).
Together, these will create a “supersonic tsunami” of productivity. The cost of producing basically everything including food, housing, healthcare, goods, services, will collapse toward zero. Scarcity ends. We move into a post-scarcity or near-post-scarcity economy where material needs are met so easily and cheaply that the traditional reason for “saving for retirement” disappears.
In that world, the idea of working your whole life, putting money aside, and then living off a pension in old age simply stops making sense. You won’t need a big pile of savings because the baseline cost of a comfortable life will be extremely low. Musk has tied this to his broader ideas of universal high income (not just basic income) and an “age of abundance” where work becomes optional for most people, so a bit like the future ‘Star Trek’ presents.
He’s not saying governments will scrap pension systems overnight or that everyone will suddenly be handed free stuff. He’s saying the economic pressure that makes pensions necessary today will evaporate because technology will solve the underlying problem of scarcity.
However even if Musk is right about abundance, that does not mean the future will automatically be happy. Work is not only a way of earning money. It gives many people routine, identity, status, friendships and a reason to get up in the morning. A post-scarcity society may solve material poverty while creating a new crisis of purpose. If people are no longer needed as workers, they will still need to feel needed as parents, neighbours, creators, carers and citizens.
This ties in to changes in the near term: The world has a shortage of children. The UK has now more people dying than are being born, and a replacement rate of 1.4 instead of 2.1, which is the rate needed to maintain the population. To put it in simple terms, less children are being born each year and so there is less new people in the work force to replace retiring workers.
One possible consequence of the impact of the age of AI abundance is a reversal of the economic pressures that pushed every adult into full-time paid work. If technology makes one income sufficient again, some families may choose a more traditional division of labour. But that should be a choice, not an economic necessity, and not a return to the limited options of the 1950s. For this to become close to a reality, AI would have to produce such huge productivity benefits that the need for individual taxation ends, allowing workers to keep what they earn to finally provide for a nuclear family. Food, clothing, housing, the basics of life become abundant for everyone, giving you the choice of what to do with your time. Family or work, you can choose without feeling that you’re missing out on life.
So should you stop saving? No. Not yet. Musk may be describing a possible destination, but he is not giving ordinary families a safe financial plan for the journey. The only person you can rely on to provide for your future is yourself, and so saving and investing is a necessity to ensure a reasonable standard of living.
Until abundance is real, reliable and fairly distributed, the old rules still apply: save, invest, reduce dependence where you can, and learn to use the technologies that may reshape work. But we should also begin preparing for the deeper question an age of abundance would raise: not simply how we pay for retirement, but what we do with a life no longer organised around economic survival.
