Can AI help you figure out how much money you need to retire?
About 20% of Americans use AI chatbots for financial advice, with half of workplace AI users applying it to retirement planning, according to studies by Pearl and MissionSquare Research Institute. Experts like Luke Delorme of Tableau Wealth highlight AI’s potential for basic retirement simulations, though critics like Boston University economist Laurence Kotlikoff warn it risks flawed advice due to Wall Street-influenced training and oversimplification of complex retirement factors.
A growing number of Americans are turning to artificial intelligence for retirement planning, with 20% using AI chatbots for financial advice, per a September study by Pearl. Half of workers who use AI at work also apply it to retirement planning, double the rate among non-AI users, according to MissionSquare Research Institute. The need for such tools is urgent: Americans now expect to work four years longer than desired due to rising living costs, with a median retirement savings balance of $40,000—far below the $1.5 million needed for comfortable retirement. Financial planner Luke Delorme of Tableau Wealth in Massachusetts says AI can assist with basic retirement questions, such as running Monte Carlo simulations to estimate sustainable annual spending. These simulations analyze thousands of potential market scenarios, helping users assess whether their savings will last. Delorme notes AI’s output is improving but cautions it remains imperfect. Critics argue AI tools lack depth for complex retirement planning. Boston University economist Laurence Kotlikoff warns AI may provide misleading advice, as it relies on Wall Street’s asset-management-focused models rather than individualized, nuanced financial strategies. Social Security’s potential 20% benefit cut in six years adds urgency, but AI currently struggles to address tax impacts, longevity risks, and other retirement intricacies. While AI offers a starting point for retirement calculations, experts emphasize the need for human oversight. Delorme acknowledges AI’s growing utility in generating preliminary financial insights, but Kotlikoff stresses that AI’s limitations could lead to harmful oversimplifications for retirees. The debate highlights AI’s dual role as both a promising tool and a potential pitfall in financial decision-making.
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