I Asked ChatGPT How To Retire With No Savings: Here’s What It Said
Written by
Crystal Mayer
Edited by
Cory Dudak
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While ChatGPT is adept at turning an image of a pet into a human or solving a 5th grade math problem, it’s often overlooked for more practical applications. The AI tool can be used for a wide variety of topics, however, including retirement.
While the chatbot should not be used in place of a financial advisor, it can be good for basic explanations and overviews. Here are the options ChatGPT recommended when asked how to retire without any savings, and whether it is sound financial advice.
Keep Working
First, ChatGPT recommended to keep working. The AI tool is not wrong when it comes to this messaging. Many retirees (or hopeful retirees) have picked up second jobs to supplement their income during retirement. According to a CNBC Your Money retirement survey, just 11% of respondents said they didn’t plan to work after they retired. Over half surveyed said they plan on working either because they wanted to or because they needed to.
Apply for Government Assistance
The second option recommended by ChatGPT was to apply for government assistance. According to the famed AI assistant, individuals in the U.S. who have worked for at least 10 years are likely eligible for Social Security, while other options include Medicare for healthcare coverage beginning at age 65, Supplemental Security Income (SSI) for low income seniors, SNAP and housing vouchers offered by state or local organizations.
The CNBC survey found that 80% of retired Americans relied on Social Security benefits. Unfortunately, future retirees may not have as many government assistance programs to draw from. The uncertainty of Social Security funding may mean retirees without savings will have to seek out other sources of income once they quit their 9-to-5.
It is projected by the Social Security Administration that the reserves of the Old-Age and Survivors Insurance (OASI) Trust Fund will become depleted by 2033, meaning only 77% of benefits will be payable at that point. Without legislative action, the situation is expected to become more dire over the next decade.
Cut Living Costs
ChatGPT also suggested retirees without savings cut living costs by sharing housing, relocating to a lower-cost-of-living area or finding subsidized senior housing. While basic, this suggestion is sound. Retirees can save a substantial amount of money by downsizing or moving to an area with a low cost of living, including affordable healthcare.
Monetize Assets
While less appealing to some, ChatGPT suggested retirees could monetize their assets, meaning renting out a room in their home or selling valuables. The AI tool also recommended getting a reverse mortgage, although it did note that it should only be considered “if you’re well-informed.”
The Federal Trade Commission cautioned older homeowners that reverse mortgages can be financially risky. The non-traditional mortgage increases a homeowner’s debt while eating up the equity they have in their home, and it can come at a costly price with fees often exceeding those of other home equity alternatives.
Barter and Exchange
Next, ChatGPT recommended trading skills or services for housing, meals or other needs. In real life, bartering in exchange for food or shelter may not be sustainable over a long period of time and could be tricky unless it involves close, trusted family members.
Learn New Skills
The chatbot suggested retirees without savings learn a new skill with free or low-cost training through the library, AARP or community centers. Learning a new skill, ChatGPT said, could help a person stay employable longer. For retirees without a nest egg, working may be essential. Broadening a skillset is never a bad idea.
Adopt a Frugal Retirement Lifestyle
The AI assistant also suggested adopting a frugal lifestyle by growing your own food, attending free community events and using public transportation. While the advice is good in general, it is far too broad to be applicable to the real world. Retirees without savings will need a detailed plan of how they can make money and spend within their means.
Consider ‘Geoarbitrage’
Finally, ChatGPT recommended “Geoarbitrage.” Global workforce management company Velocity Global defined geoarbitrage or geographical arbitrage as earning income in a high-cost area while living in a lower-cost region. Applying this principle, retirees without savings can move to a country with a lower cost of living while working in a market that pays more, thereby stretching retirement dollars further. It is imperative, however, to do considerable research before relocating to another country.
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