facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
Can Artificial Intelligence (AI) Help Me Plan My Retirement? Thumbnail

Can Artificial Intelligence (AI) Help Me Plan My Retirement?

By Jeffrey Meenes, CFP® (Published Date April 25, 2024)

Artificial Intelligence (AI) has become increasingly popular in recent years, and it seems it can do almost anything! But can AI help you plan your retirement? The answer is that while AI can be a powerful tool for research, it doesn’t replace the need for a human financial professional who understands your unique goals.

Let’s examine how AI can be a helpful tool in some ways and its limitations.

Understanding the Limitations of AI

Retirement planning is a deeply personal endeavor shaped by individual goals, risk tolerance, financial resources, and lifestyle aspirations. Despite its impressive capabilities, AI can’t understand the intricacies that make each person’s financial journey unique. It operates based on patterns and historical data, which might not always capture the full scope of an individual's or family's needs.

In addition, even the most cutting-edge AI tools still “hallucinate” or “create nonsensical or inaccurate outputs.”1 As you can imagine, putting something as important as retirement planning into the hands of a tool that can provide completely inaccurate information is risky and not advised.

The Human Element in Financial Decision-Making

One of the primary reasons AI can’t replace human involvement in retirement planning is the inherently emotional and subjective nature of financial decision-making. Personal goals, family dynamics, and lifestyle preferences are subjective variables that can significantly impact retirement planning. No matter how sophisticated, a machine can’t understand the emotional nuances of financial planning.

Furthermore, retirement planning often involves considering life events and uncertainties that AI struggles to predict accurately. Personal health, family emergencies, or changes in market conditions are dynamic variables that require human intuition and adaptability. While AI can process historical data and identify trends, it can’t anticipate unforeseen events that may alter the course of one’s financial journey.

The Importance of Human Professional

Financial professionals are indispensable when it comes to financial planning. They can tackle complex topics like tax efficiency, asset allocation, and portfolio rebalancing.2

Financial professionals may leverage the insights provided by AI tools, but they also incorporate qualitative information from clients and consider their unique circumstances and preferences. Human professionals are skilled in interpreting the emotional aspects of financial decision-making, providing a level of guidance and understanding that AI can’t replicate.

  1. https://ibm.com/topics/ai-hallucinations
  2. https://www.forbes.com/advisor/retirement/financial-advisors-retirement-savings/

This content is developed from sources believed to be providing accurate information, and provided by Meenes Wealth Partners. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.