How Technology Is Set To Change Our Retirement
Retirement is a stage in life that everyone hopes to get to at some point.
12:37 17 April 2020
It represents a mixture of emotions as you say goodbye to the working world and hello to a life of relaxation. You’ll have lots of extra time on your hands, which means you need plenty of money to fund any of your elaborate retirement ambitions.
The traditional methods of saving for retirement are no longer as prominent as they used to be. New technologies have come along to disrupt the system and change the way a lot of people retire.
Mobile technology has offered a wealth of new ways for people to plan for retirement. One of the best examples of this is an app called Moneybox. Within this app, you can set up a lifetime savings account and use it for your retirement. You contribute to it all the time, but here’s where the technology gets even better. Apps like this will ask to be connected to one of your bank accounts or debit cards. When you make purchases, you can round up the difference and automatically deposit it in the savings account.
For example, you buy a coffee for £2.50, and the purchase is rounded up to £3, with the remaining 50p going to the savings account. In essence, you have automated retirement savings that kicks into action whenever you go shopping. This has given us a brand new way of preparing and saving for retirement - and we barely have to do anything!
Technology has also given us the idea of robo investing. While this may sound like a futuristic concept where robots invest for you, it’s actually nothing like that. Instead, we have different online investment platforms where you can access an investment portfolio. Obviously, you don’t have much knowledge in this domain, which is where the ‘robo’ side of things comes in. You’re given a robo advisor who will take care of your investments and manage your portfolio.
Effectively, this is just a regular advisor who works remotely and handles lots of portfolios. This technology wasn’t available to generations before us, limiting their investment options. Now, it’s much easier for you to diversify your investments and generate more money for retirement.
Online Pension Plans
A more obvious benefit of technology is that it’s given us plenty of online pension plans to choose from. Previously, you were stuck with a state pension and a pension plan from your employers. Most of your parents only had this to deal with when they were planning for retirement.
Now, you have access to many online pension plans that you can set up privately from your state or employer’s pension. They give you yet another way of funding your retirement, and you can even combine pension plans into one easy-to-manage online plan. This has made planning your retirement a lot easier than it used to be. The only problem with this is that diversity can mean you end up with a few bad eggs here and there. It’s not uncommon for someone to be mis-sold a pension online by a fraudulent company. Ironically, that’s one other way technology has changed things - it’s easier to get scammed.
More Money From Investments
Lastly, you can retire with more money now than ever before. This doesn’t have anything to do with diversifying investments, it’s more about how technology has made investing more efficient and productive. With things like AI, machine learning, and Big Data, investment returns have been improved. We’ve been empowered with technology that makes it easier to make more accurate decisions than ever before.
To make things even better, technology constantly evolves. When you think about it, we’re still very much in the early stages of understanding how to make the most out of Big Data, AI, etc. the more we use these technologies, the more they will adapt. So, investments made now can generate more returns in the future as the technology gets even more efficient.
The overall summary is that technology is mostly changing retirement for the better. It’s offering new and more effective ways of investing money and saving for this stage in life. Previous generations didn’t have access to things like mobile savings apps, online investment platforms, and numerous pension plans. This is all highly beneficial as it means we can retire with more confidence than before. If you understand how to prepare for retirement and how to utilise technology, then you won’t have to deal with money problems in the future.