Nowadays, people turn to AI for just about everything. Need relationship advice? Have a vent session with ChatGPT and see what kind of guidance it can provide. Not sure what to eat for dinner? AI has got you covered with a dozen recipes and ideas using what you’ve got in your fridge. However, there are some things people are a little apprehensive about when it comes to AI’s abilities, and rightfully so. AI tools can help with research, expanding knowledge and getting quick answers when you need them, but have they evolved so much to the point where they can assist with things like retirement and financial planning? Experts lean toward no. Here, read all about using AI for your retirement plan, and why experts in the field remain apprehensive.
What financial experts say about AI retirement tools
In a recent episode of the podcast Decoding Retirement, Nick Holeman, director of financial planning at Betterment, a digital advisory company, says AI isn’t quite at the point yet where it can truly understand the nuances and intricacies of retirement planning. “I would be cautious about using it for personalized financial advice right now,” Holeman said. “We’re seeing a lot of traction with general financial education. In that case, it’s a brilliant tool. It’s really powerful. It can be really incredible. But using it for personalized financial advice, I don’t think it’s quite there yet.”
That isn’t to say AI serves no purpose in financial planning whatsoever, but Holeman explained that knowing the right questions to ask and having some degree of literacy when it comes to financial planning is important. “Prompt engineering,” as he put it, can be one of the keys to avoiding “hallucinations” with AI.
“Large language models weren’t really built to do math,” he explained. “We’re seeing that get a little bit better as well, but still a little bit of concern there. So it’s moving incredibly fast. I think we’re not far away from it, but we’re just not seeing that widespread adoption quite yet.”
What AI can help with: from short-term savings to budgeting
While retirement planning using AI at this point in time isn’t recommended, it’s a tool that can still be extremely helpful when it comes to saving money in other areas of life, no matter how small they might seem. Though long-term savings plans like retirement might not be when you want to turn to AI, short-term budgets can be improved upon with the help of AI tools and can play a helpful role in personal finances. Using AI to analyze your spending habits can help pinpoint the areas where you’re likely to dish out more money and help you going forward to address such areas.
In addition to budgets, several tools use AI to gather deals and coupons that also help save money, and on top of that, you can truly get as specific as you wish when it comes to turning to AI to save money. Looking to slash your grocery bill? Get specific and ask AI to lay out a few budget-friendly meal ideas that utilize you and your family’s favorite ingredients, or whatever is on sale that week at the store. Got leftovers in the fridge that you don’t want to go to waste? Ask an AI assistant something like, “What can I make with leftover lasagna?” and see how simple it is to stash away those small savings into big ones.
