ChatGPT Planned a $50K/Year Retirement: Financial Planners Pointed Out the Flaws
Written by
Chris Adam
Edited by
Jenna Klaverweiden
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If you’re looking for help with a retirement budget and want to try going it alone, ChatGPT may seem like a good place to start. In fact, here’s what ChatGPT said about this kind of retirement planning: “A $50,000-per-year retirement can be comfortable and stable for many people — but what it looks like depends heavily on where you live, housing costs, healthcare and lifestyle choices.”
However, the artificial intelligence (AI) chatbot may fall short with its retirement plan. Here’s what ChatGPT advised for a $50,000-a-year retirement, as well as what some financial planners and experts had to say about its plan.
ChatGPT’s Suggested Budget
When planning for a $50,000-per-year retirement, ChatGPT gave this sample monthly budget:
- Housing: $800 to $1,400
- Utilities and internet: $250 to $350
- Food: $500 to $700
- Transportation: $300 to $500
- Healthcare: $400 to $700 (note that this would include Medicare premiums, supplemental plan and out-of-pocket spending)
- Insurance and miscellaneous: $150 to $250
- Fun, travel and gifts: $300 to $600.
The Responses From Financial Planners
So what do financial planners think of ChatGPT’s plan? Here are a few things they pointed out.
Personalization
Marguerita Cheng, CFP, CEO of Blue Ocean Global Wealth, said a client used a simple financial planning tool, and she noticed that the tool didn’t take into consideration that even though his mortgage would eventually be paid off, property taxes and homeowners insurance would persist.
“Basic financial planning applications and ChatGPT may not provide the opportunity for interactive financial planning and scenario planning,” Cheng said. “They may not allow as much personalization for risk tolerance.”
Brandon Gregg, CFP, advisor with BBK Wealth Management, also noted that personal circumstances are an important consideration. “It wholly depends on a person’s financial situation. Unfortunately, many people live with a fair amount of debt. The biggest struggle for planning is cash flow in my experience,” he said.
Flexible and Emergency Expenses
Taylor Kovar, CFP, CEO of 11 Financial, noted the ChatGPT plan starts to feel shaky when it assumes everything stays consistent year after year. He added that taxes don’t stay consistent, and Social Security may be taxed lightly one year and more heavily the next, depending on how withdrawals line up.
ChatGPT’s plan also doesn’t account for unexpected expenses. Annie Cole, Ed.D., money coach and founder of Money Essentials for Women, gave this warning about the ChatGPT proposed budget: “This plan only works if the retiree can stick to the budget without any emergency pop-up expenses, which is unrealistic. A small buffer of 1%-2% should be added to the overall budget at minimum.”
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