Caitlyn Yingling had a 401(k) but never looked at it. When she did, after listening to a personal finance podcast in September, she was stunned. As far as her investment allocations were concerned, the 32-year-old had already retired \u2013 10 years ago.<\/p>\n
A closer look at her account, housed at Fidelity, showed why. Her retirement savings, which were in a target-date fund \u2013 a more conservative investment fund designed to automatically adjust risk as someone ages \u2013 were invested for someone who would have retired in 2015.<\/p>\n
\u201cI was surprised; I was mortified,\u201d said Yingling, a senior corporate recruiter in Dallas.<\/p>\n
Yingling used ChatGPT to help revise the target-date fund, which is now set to a retirement year of 2060, when she turns 66. Then the chatbot urged her to reallocate her investments using a more aggressive strategy, like increasing her domestic and foreign stocks to 80% from 40%. She later encouraged her husband to review his own retirement account, which itself was at a moderate risk level, and changed it as well.<\/p>\n
\u201cI don\u2019t know anything about investing; I\u2019m very amateur,\u201d Yingling said. \u201cThis is a tool that has helped me educate myself a little bit and set me on this path to then feel confident enough to look into what\u2019s available to me.\u201d<\/p>\n
As more people turn to artificial intelligence chatbots like OpenAI\u2019s ChatGPT for everyday financial advice, some are now relying on them to make higher-stakes decisions. Nearly one-third of people who have used generative AI for financial advice said they sought its help saving for retirement, according to a survey in August of more than 1,000 people by Intuit Credit Karma.<\/p>\n
(The New York Times has sued OpenAI, claiming copyright infringement of news content related to AI systems. OpenAI has denied the claims.)<\/p>\n
The people turning to AI chatbots for retirement planning advice cite several reasons: The tools are easy to use, respond instantly and often don\u2019t charge fees \u2013 a draw for those who can\u2019t afford or don\u2019t have access to a professional financial adviser.<\/p>\n
But using AI-powered financial guidance can come with significant risks. Chatbots can produce inaccurate or overly generalised advice, misinterpret personal circumstances or offer recommendations that lack important context, said Megan Slatter, a wealth adviser at Crewe Advisors. Despite the perceived benefits, more than half of Americans who acted on financial advice from generative AI told Credit Karma they ultimately made a poor financial decision or a mistake.<\/p>\n
Some people are using chatbots to ask questions they may be embarrassed to ask a human adviser, then turning to more traditional resources to verify the answers.<\/p>\n
After Yingling adjusted her investment strategy to take on more risk, she reviewed those changes with a financial adviser she could talk to for free, a service her employer provided. The adviser noticed that the money she had already invested was still stuck in her old fund settings and helped her make the update, while also asking broader questions that the chatbot hadn\u2019t raised: How much she plans to spend in a month, for example, and how long she expects to live, to estimate how much she needs to have by the time she retires.<\/p>\n
Financial advisers say that while AI tools can be useful starting points, any guidance \u2013 particularly around retirement planning \u2013 should be reviewed with a professional before being put into action, as chatbots tend to be agreeable and sometimes miss crucial information.<\/p>\n
Financial advisers recommend that users avoid providing sensitive financial details or personal identifiable data like income, detailed breakdown of expenses, bank statements or a Social Security number. Instead, people should provide general numbers or rough ranges to protect their privacy, said Andy Schmidt, vice president and global industry lead for banking at CGI, an IT and business consulting firm.<\/p>\n
After marrying in 2024, Lydia Iyamu Perisanidou, 33, moved to Phoenix from Britain. The transition was more disorienting than she expected. Everyday customs and slang confused her, like why people casually said \u201c6-7.\u201d But the most daunting challenge wasn\u2019t cultural. It was financial.<\/p>\n
Understanding the American retirement system felt like learning a new language, especially compared with the structure she had known for most of her life in Britain. Figuring out what to do with her assets, and whether they could follow her across borders, became a constant source of stress.<\/p>\n
As a data scientist who founded her own IT firm, Iyamu Perisanidou had the instinct to do some research before acting, so she turned first to ChatGPT to understand the basics and get advice relevant to her situation. Terms like \u201c401(k)\u201d were unfamiliar to her, and she struggled to tell which kinds of accounts would benefit her long term. She gave the chatbot information such as her age, financial goals, current investments and desired retirement age before asking it to provide solutions. Weighing those factors, Iyamu Perisanidou ultimately chose to invest more heavily in stocks, accepting a higher level of risk than she once would have.<\/p>\n
Anim Aweh went to ChatGPT for a different reason. She wasn\u2019t looking to learn the basics, but to figure out how to retire early \u2013 by 45, if possible. Burned out from her job as the CEO of a mental health practice for almost eight years, and shaped by seeing her parents struggle with retirement and savings, she was determined not to repeat their story.<\/p>\n
She laid out her situation for the bot, giving it her age, estimated income and her ownership of three investment properties. To her surprise, the chatbot\u2019s first recommendation was a referral to a financial adviser to understand her options. But it went on to suggest paying down her US$25,000 (RM99,112) in debt, building an emergency fund that could cover six to 12 months of expenses and exploring other passive income streams.<\/p>\n
Two years later, she hasn\u2019t used the chatbot again, but the advice stayed with her. Aweh, now 37, is still aiming to retire in the next eight years. But some things have changed. She closed her practice after recognising she couldn\u2019t sustain the overhead costs and returned to work as a therapist. Aweh, who lives in Atlanta, also began investing weekly into her individual retirement accounts (both a traditional and a Roth) and now consults a financial adviser regularly.<\/p>\n
Despite the changes, she said she\u2019s on track to retire comfortably by 45 and without the worries her parents had.<\/p>\n
\u201cI\u2019m just planning for better,\u201d Aweh said. \u2013 \u00a92026 The New York Times Company<\/p>\n