I Asked ChatGPT When I’ll Be Able To Retire Based on My Current Finances — Here’s What It Said

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If there’s one thing ChatGPT is good at, it’s compiling information rapidly. This can be extremely helpful if you’re trying to get organized about your retirement planning. Since there are so many considerations involved in figuring out when you can afford to retire, it’s immensely useful to have an AI bot like ChatGPT provide a list of factors to consider.

One caveat is that no AI tool can accurately predict variables like your long-term investment return, the rate of inflation over time, or your ability to stay within your budget. But then again, neither can a human financial advisor. What ChatGPT can do is allow you to plug in different numbers and tinker with your model to see when you might be able to retire based on changing circumstances.

With all this in mind, here’s a look at ChatGPT’s response to the question of when you might be able to retire based on your finances.

Initial Considerations

Much like a human financial advisor, ChatGPT first asked to gather more information about personal variables before it could spit out a recommendation.

“I’d be happy to help you determine when you can retire,” it said. It then asked for a series of specific data points about my current financial situation and retirement goals, including:

Income & Savings

• Current age:
• Target retirement age (if any in mind):
• Annual income (before taxes):
• Current retirement savings (401(k), IRA, brokerage, etc.):
• Other assets (home equity, savings accounts, etc.):
• Expected Social Security benefit (at full retirement age):
• Monthly contributions to retirement accounts (401(k), IRA, etc.):

Expenses

• Current monthly living expenses:
• Expected monthly expenses in retirement (often 70%-85% of current expenses):
• Do you expect to have a mortgage or rent in retirement?

Investment Info

• Average investment return you’re assuming (e.g., 5-7%):
• Desired annual withdrawal in retirement (if known):
• Do you want to leave an estate or spend down to zero?

“Once I have this info, I can estimate your ‘retirement readiness‘ and project when you could reasonably stop working while maintaining your lifestyle,” ChatGPT continued. “Let me know if you’d prefer a conservative or aggressive projection style as well.”

Plugging in Estimates

ChatGPT is the epitome of what makes computers and AI both good and bad. They’re only as valuable as the data you feed into them. As the old expression goes, “garbage in, garbage out.” That’s why it’s important to do your own legwork, even if ChatGPT might be doing some of the heavy lifting. 

Plugging some reasonable real-world numbers into the ChatGPT model spit out the following results regarding a potential retirement age:

• Current age: 35
• Current retirement savings: $30,000
• Monthly contributions: $500
• Annual income growth: 2% (not factored directly in contributions here)
• Investment return: 5%
• Expected Social Security: $1,900/month starting at 67
• Inflation assumed: ~2%
• Expected retirement expenses: $4,000/month in today’s dollars (inflation-adjusted)
• No mortgage in retirement
  

How We’ll Calculate:

• You need a portfolio sufficient to cover your spending gap (expenses minus Social Security) adjusted for inflation.
• We’ll find the earliest age where your portfolio can sustain withdrawals over a 25-year retirement period and leave $100,000 as an estate.

Portfolio values increase due to 5% growth + continued contributions until retirement.

Estimated Comfortable Retirement Age: 70-72

At around age 70 to 72, your portfolio combined with Social Security should comfortably cover your expenses and allow you to preserve your estate goal.

What You Can Do To Retire Earlier:

• Boost monthly savings (increase from $500 to $1,000+)
• Reduce expected retirement expenses
• Delay Social Security past 67 (max at 70)
• Consider part-time work or other income sources in early retirement

The Bottom Line

ChatGPT can only make projections based on what you tell it, but it’s helpful to have AI perform all the calculations and make suggestions as to where you can improve. If nothing else, it’s a good starting point in terms of assessing where you stand, and how realistic your retirement projections are.

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