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Generative AI could replace up to one-fourth of current work tasks,
from writing memos to analyzing data. (Dreamstime/TNS

The Potential Impact of AI
on your Job and Money

A recent report by Goldman Sachs Economics Research concludes that “super intelligent” artificial intelligence technology – also called generative AI – could cause “significant disruption” in the job market, notes Sandra Block, Kiplinger’s Personal Finance magazine.

The report estimated that roughly two-thirds of current jobs in the United States and Europe are vulnerable to some degree of AI automation and projected that generative AI could replace up to one-fourth of current work tasks, from writing memos to analyzing data.

The report estimates that up to 300 million global jobs could be automated through generative AI.

However, the report goes on to note that historically, this kind of labor disruption has been offset by the creation of new jobs. If that happens, we could experience a productivity boom and significant economic growth, although the timing of such a boom is difficult to predict. In the interim, though, a lot of workers will need to be retained, and some jobs will become obsolete.

“A lot of basic jobs will be done by machines, which means that employees will have to do more-advanced jobs,” says Subodha Kumar, a professor of statistics, operations and data science at Temple University.

Even if you’re not concerned about losing your job, you may be wondering how generative AI could affect the way you manage your finances. Can ChatGPT tell you where to invest your savings, or figure out how much money you need to retire comfortably?

Automation in the personal finance sector is nothing new. Millions of investors use robo advisers to recommend an investment portfolio of low-cost funds that fit their risk tolerance and investing timeline.

Generative AI programs take this process to the next level, offering the potential for advice that’s specific to your situation. For example, you can ask ChatGPT whether you should invest in a traditional or Roth IRA, or whether you can afford to retire at 55.

But much of the personal finance advice is generic, computer science experts say. Worse, in some tests of ChatGPT the information provided was outdated, and when it comes to personal finance, having up-to-date information is critical.

The quality of advice you get from AI will depend largely on how you frame your question and the information you provide about your situation. A vague question will likely result in a vague response. Likewise, if the information you provide is unrealistic – you expect to earn 15% a year on your investments, for example – an AI program will likely take your word for it. A reputable financial planner, on the other hand, will tell you to dial down your optimism.

If all you’re looking for is information about different bank accounts and interest rates, an AI program will provide what you need, Kumar says. But for more-complex questions, such as where you should invest your retirement savings, existing AI programs don’t work very well.

“Financial planners shouldn’t be worried about losing their jobs, but they have to make sure they do a better job than an automated system,” he says.

Editor’s Note: Sandra Block is a senior editor at Kiplinger Personal Finance magazine.

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