AI Is Reshaping Retirement Planning - But Should You Trust It?
- - AI Is Reshaping Retirement Planning - But Should You Trust It?
Kaili KillpackNovember 10, 2025 at 4:02 AM
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AI Is Reshaping Retirement Planning - But Should You Trust It?
Planning for retirement used to mean meeting with a financial advisor, gathering paperwork and running numbers by hand or with basic software. Today, artificial intelligence is rapidly changing that process.
From robo-advisors that suggest investments to chatbots that summarize spending patterns, AI is becoming a bigger part of how people prepare financially for their future.
Nearly half of Americans feel more comfortable using AI for money decisions than they did a year ago, according to a recent survey from Empower. Yet 62% of people still believe the human component of financial advice matters more. As AI tools expand into retirement planning, experts say they can be useful, but they come with limitations.
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How AI Is Influencing Retirement Planning
One of the biggest advantages of AI is speed. AI-powered platforms can analyze large amounts of data instantly — a process that used to take hours or days. Robo-advisors use algorithms to review users' financial goals, risk tolerance, and investment timelines. Based on that data, they may suggest retirement strategies or automatically manage investments.
These tools can also help forecast the impact of different decisions, such as how adjusting your 401(k) contributions might affect long-term savings. Some platforms now include tax-loss harvesting — selling investments strategically to help reduce taxes — a feature previously associated with professional portfolio managers.
Vasant Dhar, professor of data science at the Leonard N. Stern School of Business at New York University told GoBankingRates that AI tools can help retirees better understand risk, including how volatile certain investments may be. "Investors of all sorts need to understand risk not in terms of dollars invested, but the risk associated with those amounts," he said.
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Forecasting Health Costs — With Caveats
Healthcare is one of the most unpredictable retirement expenses. Dhar says AI can estimate typical costs based on people of similar age and health profiles. But these numbers should be considered estimates, not exact predictions. Individual health needs and insurance coverage can vary widely, and people should still use personal judgement.
Where AI Falls Short
AI tools can process information, but that doesn't mean they always get it right. Investing in the Web performed a study where researchers asked an AI chatbot 100 personal finance questions — and 35% of the answers were wrong or partially incorrect.
Researchers at Investing in the Web found that AI sometimes draws on outdated sources or blends different pieces of information without noting the limitations. In areas like taxes or financial aid — where rules change frequently — even a small error could lead to costly mistakes. The researchers concluded that AI can be useful for gathering information, but it should not be treated as a standalone financial planning tool.
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Americans Want AI — But Not Without Advisors
As AI becomes more common, people are showing greater willingness to use it — but not as a replacement for professional advice. According to Empower:
47% of Americans say they now feel more comfortable using AI in their financial lives.
56% would use AI to help plan for retirement.
But 62% still say human insight matters more.
Many financial advisors are adopting AI for administrative tasks, such as report preparation or data analysis, freeing up more time for one-on-one conversations. But experts agree that financial decision-making — especially emotionally complex decisions like choosing when to retire — still benefits from human guidance.
The Bottom Line: Use AI as a Tool, Not a Stand-In
AI can help you get organized, explore scenarios, and learn more about your finances — particularly if you’re starting to plan for retirement or looking to optimize investments. But experts suggest double-checking any financial advice AI produces and involving a human advisor for major decisions.
AI may reshape retirement planning, but trust still comes from understanding your goals — and that's something technology can't replace.
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