Sorry, But AI Alone Doesn't Cut It for Financial Planning
Artificial intelligence has its place in retirement planning — but only as a tool. It falls short in several key areas that require a human touch.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
Artificial intelligence (AI) is a powerful tool in financial planning, using data-driven analysis to make recommendations. But it often creates a false sense of security for individuals who are saving and investing for retirement.
While robo-advisers and AI-driven strategies can optimize investments, they cannot replace the tailored, long-term planning strategy by human retirement planners with real-world experience needed for long-term financial success and a well-funded retirement.
People need a custom-built financial plan across five critical areas — investment risk, income, health care, taxes and estate planning — that aligns with personal goals and risk tolerance when life changes. Human retirement planners are better equipped than AI to handle the nuances and numerous moving parts of a retirement plan.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
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.
As Stephen Covey said, "Begin with the end in mind." A strong financial plan that you understand and checks all five critical areas listed above is the best way to set yourself up for success to reach your financial goals.
Start where you are
It’s crucial to start where you are today and plan for the retirement you want to achieve — and a retirement planner with real-life experience is the best way to help you get there.
The importance of working with a retirement planner rather than relying on AI is highlighted in the distribution phase, or what we call “Phase II.”
You’re retired at that point. The paychecks stop coming, and you rely on assets to support you. You face major changes across the board, in taxes, investment planning, estate planning, health care, Medicare, Social Security, etc.
You have too much at stake to let AI take control of every aspect of your retirement plan, especially when market corrections midway through retirement are practically inevitable.
Here are some areas of retirement planning in which AI falls short:
It leaves some missing pieces
AI cannot anticipate complex tax strategies, estate planning needs or long-term care costs — key factors that affect wealth over time.
A financial plan must integrate all these elements.
It relies on set-it-and-forget-it investing
AI offers algorithmic rebalancing and investment suggestions, but blind trust in algorithms can lead to missed opportunities, unexpected tax burdens and lack of preparedness for economic shifts.
It fails to bridge the emotional and behavioral gap
AI lacks the ability to coach people through emotional elements such as market downturns, major life events or personal financial decisions that require a human touch and strategic adjustments. In these cases, people need personalized service and a problem-solver they can relate to.
A retirement planner factors in your circumstances and values, placing relationship-first planning over rule-based automation. A trusting relationship built between planner and client is especially valuable when financial adversity hits.
It can't talk back
True financial security comes from understanding your financial plan and ensuring it is adaptable, not just automated. AI can assist, but individuals must take ownership of their financial future.
A big part of the planner-client relationship is being able to have hard conversations to understand what the client wants and integrate those goals.
Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth, our free, twice-weekly newsletter.
AI’s impact on many industries can’t be overstated, but in the financial industry, the role of advisers remains irreplaceable. Their expertise, empathy and overall experience enable them to provide direction over the long term and identify alternatives when adjustments are necessary.
Retirement financial planners help their clients through all kinds of life events and, along with managing the five moving parts of retirement, give sound advice and provide clients with an emotional safe space. Such an all-around, holistic approach cannot be duplicated by AI.
At best, AI can provide technological supplements to the real plan, but not all the plan’s components or, most importantly, the human connection.
Dan Dunkin contributed to this article.
Appearances on Kiplinger.com were obtained through a paid public relations program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
The Retirement Solution is an investment adviser registered under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply any level of skill or training. For more information please visit: adviserinfo.sec.gov and search for our firm name. DA-003101.2
Related Content
- How AI Will Impact Your Workplace Retirement Plan
- The Explosion of New AI Tools
- How to Protect Your Privacy While Using AI
- How AI Can Help Take the Emotion Out of Investor Decisions
- Should You Trust Robo-Advisers With Your Retirement?
-
How Much It Costs to Host a Super Bowl Party in 2026Hosting a Super Bowl party in 2026 could cost you. Here's a breakdown of food, drink and entertainment costs — plus ways to save.
-
3 Reasons to Use a 5-Year CD As You Approach RetirementA five-year CD can help you reach other milestones as you approach retirement.
-
Your Adult Kids Are Doing Fine. Is It Time To Spend Some of Their Inheritance?If your kids are successful, do they need an inheritance? Ask yourself these four questions before passing down another dollar.
-
Your Adult Kids Are Doing Fine. Is It Time To Spend Some of Their Inheritance?
If your kids are successful, do they need an inheritance? Ask yourself these four questions before passing down another dollar.
-
The 4 Estate Planning Documents Every High-Net-Worth Family Needs (Not Just a Will)The key to successful estate planning for HNW families isn't just drafting these four documents, but ensuring they're current and immediately accessible.
-
Love and Legacy: What Couples Rarely Talk About (But Should)Couples who talk openly about finances, including estate planning, are more likely to head into retirement joyfully. How can you get the conversation going?
-
How to Get the Fair Value for Your Shares When You Are in the Minority Vote on a Sale of Substantially All Corporate AssetsWhen a sale of substantially all corporate assets is approved by majority vote, shareholders on the losing side of the vote should understand their rights.
-
Dow Leads in Mixed Session on Amgen Earnings: Stock Market TodayThe rest of Wall Street struggled as Advanced Micro Devices earnings caused a chip-stock sell-off.
-
We're 62 With $1.4 Million. I Want to Sell Our Beach House to Retire Now, But My Wife Wants to Keep It and Work Until 70.I want to sell the $610K vacation home and retire now, but my wife envisions a beach retirement in 8 years. We asked financial advisers to weigh in.
-
How to Add a Pet Trust to Your Estate Plan: Don't Leave Your Best Friend to ChanceAdding a pet trust to your estate plan can ensure your pets are properly looked after when you're no longer able to care for them. This is how to go about it.
-
Want to Avoid Leaving Chaos in Your Wake? Don't Leave Behind an Outdated Estate PlanAn outdated or incomplete estate plan could cause confusion for those handling your affairs at a difficult time. This guide highlights what to update and when.
