Here’s the Truth About Using AI to Plan Your Retirement

Artificial intelligence (AI) is smart, but it’s not magic. Can you trust AI to tell you:

Plenty of people aren’t just experimenting with artificial intelligence — they’re starting to rely on it. In a 2024 Experian survey, nearly half (47%) said they’ve turned to an AI chatbot for financial advice.

What they might not realize is that AI often gets it wrong: 35% of the time in a recent study. Researchers at Investing in the Web asked ChatGPT 100 personal finance questions, and more than a third were either partially incorrect or flat-out wrong.

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The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

AI tools are powerful and impressive and fun to use. But when it comes to more complex and nuanced tasks, they start to fall short.

I’ve personally spent hours testing ChatGPT with my own household budget. I caught and corrected several mistakes, only to find those same errors showing up again later in the process.

There’s no question that artificial intelligence is here to stay. Even in its early days, it’s reshaping nearly every industry, including finance.

As someone who’s spent decades helping people find truly trustworthy, qualified financial advisers, I want to help demystify how AI is being used in finance, where it’s helpful, and why human judgment still matters most.

Where AI is showing up in finance

Right now, AI is great at one thing: processing vast amounts of data, fast. It can recognize patterns, summarize conversations and even flag potential risks based on your investment profile or spending behavior.

Many financial advisers are already using AI to handle the time-consuming administrative tasks, such as compiling reports, analyzing data, summarizing client meeting notes or automating parts of the onboarding process.

But AI can help advisers even more by monitoring changing tax rules or modeling portfolio outcomes in different market scenarios.

All this means better preparation and more time for human conversations. It frees advisers to do what they do best: listen, interpret and guide people through life’s financial decisions with empathy and good judgment.

How will AI affect real financial advice?

I use AI all the time to gather information. But I’ve learned to double-check every result.

For example, when I asked it for a current report on home sales in my neighborhood (information that’s part of the public record), it missed a handful of transactions that happened more than a year ago. That meant the value of my property was not in the correct range.

When it generates recommendations, it often loses the logic that led to those conclusions. It doesn’t circle back to catch its own mistakes. That’s on the user.

The best financial advisers I know treat AI the same way. They don’t wholly rely on it. They cross-check. They use it as a time-saver, not as a replacement for real financial planning.

If an adviser is leaning entirely on AI to drive decisions or build plans, that’s a red flag. Financial planning isn’t just about plugging numbers into software.

It’s about understanding values, preferences, fears and trade-offs — all the things you don’t find in a spreadsheet.

Couldn’t AI make advice cheaper?

In some ways, it already has. By improving efficiency and automating repetitive tasks, AI helps financial advisers serve more clients faster. That can lead to more flexible or competitive pricing, which is a good thing.

But let’s not forget what people are actually paying for.

It’s not just spreadsheets and software. You’re paying for the ability to call someone when you’re scared about the markets, or when you’re trying to decide whether to pay off your mortgage or fund your kid’s wedding.

Personalized advice built around such things as your goals, taxes and estate plan is still where the true value lies.

What about robo-advisers?

Despite the name, most robo-advisers don’t actually use AI. They follow simple rules and algorithms, such as automatic rebalancing or low-cost ETF allocation.

Some are layering in basic AI tools for tax-loss harvesting or personalization, but these are still at a surface level. They’re not building a full picture of your financial life.

Robo-advisers can be a solid option for people with simple needs. But don’t confuse automation with advice.

Will AI take the place of financial advisers?

Here’s the thing: AI can’t tell when you’re quietly panicking about retirement. It can’t pick up on the tension between you and your partner about money. It doesn’t know that your mother-in-law might need memory care you can’t afford.

A financial adviser will.

Let me tell you about a client who wanted to buy a thoroughbred horse. It wasn’t a great financial decision on paper, but it mattered deeply to her.

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She had a hand injury and knew she wouldn’t be able to ride forever. Her adviser didn’t just say “no.” She helped this client work toward that goal over time, adjusting the plan so the horse purchase didn’t jeopardize her retirement.

AI would have flagged buying the horse as a bad idea and moved on. A highly qualified human adviser understood the emotional weight of the decision and made room for it.

Today, that client is showing her horse, winning ribbons and living out a dream that money alone can’t measure. (You can read more about this remarkable client-adviser relationship in my article How Her Financial Adviser Changed Her Life.)

That’s not a machine-made plan. That’s a human-made life.

Can you trust AI-generated advice?

This is a good question that I encourage everyone to ask. If you’re working with an adviser or platform, ask how they’re using AI. Are recommendations reviewed by a human? Is the data source reliable? Is there transparency?

In my own vetting process at Wealthramp, where I connect people with independent, fee-only fiduciary advisers, I’ve started asking these same questions. I want to know how — and how much — advisers are leaning on AI, because clients deserve to know what’s going on behind the scenes.

Good advisers will explain exactly how they use AI to support their expertise.

AI is changing financial advice, but it’s not replacing it. It’s making the best advisers even better by helping them work faster, stay organized and focus more deeply on their clients.

No matter how smart the technology gets, advice that truly fits your life will always require human insight. It takes time, trust and personal judgment to make the kind of financial decisions that stick.

By all means, use AI to learn. Use it to explore your options. But when it’s time to make the big decisions, the kind that shape your future, make sure there’s still a human in the room with you.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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