Three Benefits Of Using AI For Retirement Planning
Whether you realize it or not, artificial intelligence is already part of your everyday life. AI predicts your web searches, personalizes your social media feeds and optimizes your online purchases – just to name a few examples. In the future, it will also play a major role in your long-term financial planning as an entrepreneur.
How AI Is Changing Financial Planning
AI is changing how banks serve their customers, through applications like automatic fraud notifications, mobile check deposits, web chatbots and robo-advisors. You’re probably comfortable with many of these tools after years of using them for personal and business banking. Turning to artificial intelligence for tax and retirement planning is just one step further along the same path.
Incorporating AI technologies – such as machine learning, deep learning and algorithm-based machine reasoning – into complex financial forecasting and planning will be “transformational,” according to a Gartner analysis:
The ability of AI to improve predictive (what will happen) and prescriptive (the best course of action) financial forecasting processes will change the world of finance management. Currently, many financial forecasting and planning processes are manually intensive and suffer from inherent human biases, as predictive models may be “tweaked” to generate favorable (or expected) outcomes.
Our company designs financial strategies for entrepreneurs, and we’re using AI’s predictive and prescriptive strengths to mitigate risks, lower taxes and refine investments for retirement planning. Here are three key benefits of using AI to help you prepare for retirement.
It figures out the right plan for your situation.
Your retirement plan will vary depending on your life circumstances and goals. If you’re 30 years old, single and growing a business, you may be comfortable with more high-risk investments than if you’re 55 years old, helping your kids pay college tuition and hoping to retire in the next decade.
An AI-based platform collects and analyzes factors like debts, assets, income, expenses and years to retirement to determine the best plan for your individual situation. Human limitations and biases often get in the way of effective forecasting and planning. Algorithms, on the other hand, process vast amounts of data and calculate tactical solutions for lowering your tax liability so you can retire on your own terms.
It’s always learning.
Machine learning, a subset of AI, uses statistics to find patterns in data and apply them to make highly accurate predictions. Because ML algorithms truly are learning and adapting with each new data point, they become more sophisticated and precise over time.
In retirement planning, this capacity is invaluable in helping you make decisions about your financial future. Algorithms identify patterns that people can’t see, forecasting trends, risks and outcomes that will affect your investments. An AI-based retirement plan will keep getting smarter on its own, quickly adjusting to changing market conditions and finding new opportunities to reduce taxes and increase retirement benefits.
It lets you focus on your business.
Thinking about retirement is not how most entrepreneurs want to spend their days. When you are running a business, you should be dedicating your time to the work only you can do, not worrying about your finances.
When AI manages your retirement planning, the model is working for you around the clock so you don’t have to think about it. Your responsibilities are minimal once you enter your initial data. Machine-learning algorithms will continuously identify patterns and decide which markets to enter and where to allocate your portfolio. If you want to explore specific scenarios – such as the risk of getting audited for taking a certain action – an AI platform will run them for you, accurately and efficiently. But it’s ultimately up to you how involved you want to be. AI takes the burden of financial planning off your shoulders, allowing you to focus on strategic or revenue-increasing tasks that are most important to your business.
Artificial intelligence has already changed the way you live and work, and it will soon change how you retire. Get ahead of the curve, and embrace a new way of planning for the future.
Kenner French, is a former small business contributor at Forbes.com, author of three books, an executive at AI-focused VastSolutionsGroup.com and VastHoldingsGroup.com, a keynote speaker, and a Dave Matthews Band fan!
