Can ChatGPT Be Trusted for Retirement Planning?

Can ChatGPT Be Trusted for Retirement Planning?
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Mike Valles
11/18/2023
Updated:
11/18/2023
0:00

Near the end of 2022, a computer system called ChatGPT was released. It is an artificial intelligence (AI) model that allows anyone to ask questions. It responds using text similar to what a human would write. It is the first of its kind offered to the public, with other models released from other companies since.

Since computers have been used to make investing decisions for years, it would be natural to ask whether or not ChatGPT could make reliable retirement-planning decisions. As a computer, it can provide answers in minutes—if not seconds. ChatGPT has two levels, a free level and a paid one, which makes it cheaper than paying someone for the information.

Tested Against Real Financial Advisers

Some people wanted to test the financial advice offered by ChatGPT and compare it to that given by a professional adviser. The AI model quickly generated answers that had a considerable amount of financial wisdom. Overall, they were good answers and provided a lot of information.
An article at AARP revealed some of the test questions and answers, along with a professional’s evaluation of them. The answers included several options, some things to watch out for, and a general course of action.

A problem noticed right away was that ChatGPT did not show why one course of action may be better than another. Also, it did not provide specific examples or show what to do in unique circumstances.

As an example, when asked to provide the best investments that offer interest rates better than inflation, it provided many ways to earn interest, but did not say which ones might be best at a particular age. Of course, it could be because the question did not ask to show that information.

Being based on computer programming, ChatGPT is currently limited, and will always be limited, by one major factor: It can only provide answers based on the information provided. It searches the internet for answers, but if it does not have enough information about what you are looking for, it could give you a misleading answer. It is unable to know your financial situation, what you want to do or do not want to do, etc.—unless you put in those details.

ChatGPT has also been known for what are called “hallucinations.” GoBankingRates says that the hallucinations can be a mix of good information and made-up stuff—which may be incorrect. Someone depending on AI for solid information could be easily misled by it.

Personal Retirement Strategies and Goals Vary Widely

Everyone’s needs and expectations during their retirement years are different. MarketWatch talks about how health can be a factor in retirement planning.

Some people who are in good health may need to plan to live to 100, but others who may have had cancer more than once should probably plan on living fewer years—possibly to 75 or 80. Being healthy may mean you can wait until 70 before taking Social Security, but someone with poor health may need to take it much earlier to help meet rising healthcare costs.

How much you want to have or need when you retire is another important consideration and the best way to reach that goal. A more accurate calculation needs to factor in how much you already have toward retirement and in savings, how much debt you have, and what you want to do after you retire. It also may not consider that traveling can be costly, there may be taxes on retirement account withdrawals (unless you have a Roth account), inflation, etc.

Learn What You Need to Investigate Further

One thing that multiple advisers say was good about using ChatGPT to get financial advice for retirement strategies is that it can give you a good base of information and show you what you need to investigate further. It will come up with information you may not have thought about in your planning, but its answers will only come from the information it can find online, which hopefully is correct. It could also show you what questions you need to ask before you get a good answer.

Even though artificial intelligence is rapidly advancing, it is still too soon to be able to rely on financial advice given by ChatGPT or other AI bots. Interestingly, the answers it gave even advised consulting with a professional financial adviser, and it denied having enough information to provide the best advice you could get. An estate planner will look at your entire financial situation, find out where you want to go, and advise you about the best way to get there—as well as helping you to avoid problems. They will also help bring up questions you (or ChatGPT, either) may have never thought of.

Having a spouse to provide for, or if you want to leave an inheritance requires more specific information. If you possess other retirement accounts, they should also be in the information you give ChatGPT before seeking a useful answer.

Artificial intelligence will probably one day be able to provide sound retirement-planning advice. AI technology is still very new, but there is no doubt that it is rapidly developing into something better. You also should know that when ChatGPT gives an answer, it warns that you may receive inaccurate information when you use it.
The Epoch Times copyright © 2023. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
Mike Valles has been a freelance writer for many years and focuses on personal finance articles. He writes articles and blog posts for companies and lenders of all sizes and seeks to provide quality information that is up-to-date and easy to understand.