Is there anything artificial intelligence can’t do? Well, the answer is “plenty.” The more precise response is, “It all depends on what you’re asking AI.” This is especially true for retirement questions.
There’s no doubt that, like any computer, it’s a whiz at number crunching. In fact, it’s much more than that. It’s that chatty coworker who has a response to everything. But are those responses worth the pixels the text illuminates?
Every week, indeed, every day, you’re seeing improvement in popular generative AI platforms like ChatGPT, Claude, and Grok, along with their cousins Copilot and Midjourney, not to mention Gemini and Perplexity. There’s more to the list, and a different one seems to be “the best” whenever a new release emerges from the internet ether.
It seems only natural that you might want to use AI to help you with your retirement. Of course, age might temper your enthusiasm. A recent survey concludes “Nearly two-thirds of Gen Z and Millennials would follow AI’s retirement advice; 58% of Baby Boomers and 75% of the Silent Generation would not follow AI’s retirement timeline, citing lack of trust.”
Which side of the generational divide do you fall on? Which side is right? Will the following analysis change your opinion?
What does AI mean for your retirement?
Well, retirement does involve a lot of numbers, and it’s clear AI can handle that. But retirement also involves asking a lot of questions and coming up with the right answers. Correct that. Retirement requires you to ask yourself the right questions. That’s the only way to get the best answers. This is where AI can become deceptively dangerous. Or it can help you avoid those rocky shoals.
“There is something known as paralysis by analysis,” says Anthony Alexander DeLuca, senior financial advisor at Delta Advisory Group in Orlando, Florida. “That is, being flooded with too much information that the right choice becomes muddled. AI sifts through the data using algorithms and expedites diagnosis on risks, goals, and returns to find the best and most appropriate strategies.”
The best AI tools for your retirement
Here’s the beauty of some of those generative AI platforms mentioned above: they can act like Uber drivers on your road to retirement. You don’t need them all the time, but when you do, they’re just a few quick finger taps away. It’s only a matter of punching in the correct questions and framing your goals in a way that is most meaningful to you. AI can act like your GPS. Set your destination, and it will tell you the best route to dodge those troublesome traffic snarls.
“Tools for financial analysis that are powered by artificial intelligence can be used to offer an individual retirement investment strategies that are optimized to their spending, risk tolerance, and market conditions,” says Neal K. Shah, CEO of CareYaya Health Technologies in Research Triangle Park, North Carolina. “For individuals facing the overwhelming amount of choice in the retirement planning process, this can help to considerably streamline decision-making and make the process more manageable.”
Don’t be fooled, though. You can’t ask AI for winning stock picks. Well, you could, but you better be prepared to undertake a deep dive of due diligence on your own to verify what AI spits out. Instead, ask the big picture questions. Look at economic history and how potential policies and events have affected people like you in the past. You can then use that analysis to make your own investment decisions.
“Selecting appropriate investments is difficult but financial software makes this easier by evaluating market trends and assessing personal risk preferences,” says Arvind Rongala, CEO at Edstellar in Bengaluru, Karnataka, India. “Retirees can develop a stable portfolio through data-driven insights which helps to ensure their long-term financial well-being.”
Designing a good saving and investing strategy represents only half of the retirement puzzle. What happens on the other side of retirement? What happens when it’s time to spend down your retirement savings?
How to manage retirement finances with AI
Keep in mind that newly minted retirees have to deal with two competing priorities. Sure, they must continue to grow their retirement portfolios.
“AI is going to use its infinitely growing database of financial knowledge to pinpoint the exact decisions one needs to take for the most successful financial future,” says DeLuca. “That includes understanding risk capacity vs. tolerance, cash flow analysis and appropriate budgeting, and the ‘most correct’ investments to help reach such goals.”
In retirement, though, there’s more to life than investing. You must also juggle budgets in a way that considers living without a salary. AI’s role here can be a little dicey. It’s probably not a good idea to rely solely on the words of a pre-programmed machine.
“AI can simplify retirement finances by automating budgeting, forecasting cash flow, and managing investments with adaptive algorithms,” says Shah. “It’s essential, however, for retirees to ensure that AI-driven recommendations align with their personal goals and to seek human oversight for major financial decisions.”
Don’t settle for the ease of a quick AI-induced fix. Not that you should stop using AI. Use it, but use it in the manner you’d use a committee to brainstorm solutions. No idea is a bad idea. In fact, the more the merrier. The secret to success, however, lies in kicking the tires and taking a peek under the hood.
“After retirement, many individuals find monitoring expenses and handling cash flow management to be an overwhelming task,” says Rongala. “Retirees should verify that automated budgeting tools’ predictions about future expenses and savings possibilities fit their extended financial plans instead of just short-term financial benefits.”
With AI, just like any other algorithm-based search engine, it’s trust but verify.
“For individuals, tools that utilize AI can analyze massive amounts of data and, based on individual situations, simulate future scenarios faster and provide more tailored investment strategies,” says Liang Zhao, CEO at Vansary in New York City. “One platform that caught my eye recently is a company called High Peak. The platform leverages Prudential data and has built advanced AI solutions that can make smart recommendations that align with personal goals and risk tolerance. Its advanced modeling platform can provide individuals with real-time insights and forecasts—all beneficial for plan sponsors also who are looking for better modeling capabilities. A possible pitfall to watch out for includes biases in AI algorithms, which can be derived from skewed training data. For example, if the dataset doesn’t include diverse data points, the output will not be able to capture the particular nuance of the situation.”
Artificial intelligence and retirement: trusty or tricky?
Obviously, generative AI is more than simply a glorified spreadsheet. It possesses an iterative sense that builds on your conversation with it. But when it’s all said and done, AI isn’t magic. It’s just a tool. And like any tool, it can help you if you use it right. If you use it wrong, it can harm you.
The secret to using AI successfully is not to ask it to pick winners. Work with it so it teaches you to think smarter. Maybe a comfortable retirement doesn’t come from the AI store. Maybe a comfortable retirement, perhaps, means a little bit more.
And that means what it’s always meant. When it comes to giving you the best shot at a comfortable retirement, you’re the only one ultimately responsible for minding that store.