Trying to build savings for retirement? Don’t bank everything on your job.
‘Job security’ is a buzzword a lot of people throw around. For workers, it’s often a barrier. You want more savings for retirement, so you think:
Maybe I should become an entrepreneur and start my own business.
Then you think: No, it’s too risky. Besides, I have job security.
But do you really?
Sure, there’s a lot of innovation in America today and the economy’s improving. But with innovation comes volatility, and some sobering statistics.
As of April, US job cuts in 2016 were at a 7 year high. Statistics like this don’t often worry corporate workers. But the truth is, it’s not just the unskilled labor on the chopping block.
Technology Puts Every Job at Risk
New technologies have been replacing human jobs for millennia. In today’s context, most people think of machines replacing factory workers, not the back office executive. But really, everyone’s savings for retirement is at risk if they get laid off.
Take a look at Macy’s, for example. They’ve faced serious losses thanks to the likes of online retailers, and have been shuttering stores across the country. They announced plans to cut more than 4,000 jobs in 2016, and it’s not just customer service reps. Sure, none of their execs have been laid off (yet), but 165 of them got buyout packages. And you can only expect more cuts to come.
Competition from online retailers has been looming over Macy’s for a while now, but technological shifts can happen a lot faster than that. Take cloud computing. This growing section of the tech industry helps businesses manage networks, databases, hardware and software. Within a few short years, many of the workers charged with managing these technologies became obsolete when their company invested in the new system. No savings for retirement for them.
Case-in-point: Intel. This year it announced plans to cut its workforce by 11%. Why? The cloud.
No Safe Refuge With Big Business
If you play an important role at one of the top businesses in your industry, you might think you have nothing to worry about. Your job will always be around, and you’ll have plenty of savings for retirement.
Or maybe not.
According to the World Economic Forum, the average lifespan of a multinational, Fortune 500-size corporation is 40 to 50 years.
Have an important job in the corporate world? Yeah, the company you work for only has a 50/50 chance of existing 50 years after it started.
You can bet a lot of these businesses were merged, acquired, or split up into other entities, but these are all opportunities to trim the fat (your job).
And a lot of these companies really do just pass away. Nearly half of the Fortune 500 companies from 1999 were gone by 2009. Ouch.
How Will You Address Your Retirement Concerns?
No matter who you are or what you do for a living, you can’t expect your paycheck to be around forever. So if “job security” is the only thing keeping you from branching out on your own and pursuing your dreams, now’s the time to act.