How AI Can Help Your Investment Decisions, and Where It Can't

They are good at work that is mostly reading and explaining. The current generation of large language models, the technology behind ChatGPT, Claude, Gemini and the assistants now built into brokerage sites, is strongest at turning long, dense text into short, clear text.

It cannot see the future, it does not know you, and it is not accountable to you.

• It cannot predict prices. Markets move on information that is not yet public. No chatbot has an edge, and one that sounds sure about next quarter is guessing more fluently than most people do.
• It knows only what you tell it. Your cost basis, your pension survivor option, your health, what you have promised your children, and how you slept in 2008 are all missing unless you supply them. Advice built on half the facts is half-advice.
• It may not be current. Models are trained on data up to a cutoff date. Contribution limits, tax brackets, Medicare premiums and IRMAA tiers change every year, and the model may give last year's figures without saying so. Some tools search the web, which helps, but they can still pick up an outdated page.
• It owes you nothing. A registered investment adviser has a fiduciary duty to act in your interest and is overseen by the SEC or a state regulator. A general chatbot has no such duty, no registration, and no one you can complain to if its answer costs you money.

Because they are built to produce plausible text, not verified facts. A language model predicts the most likely next words from patterns in its training data. Most of the time that gives a correct answer. Sometimes it gives an answer that sounds just as confident and is wrong. The industry calls this hallucination.

In retirement planning, the errors tend to follow a pattern. Watch for these:

• Superseded rules. The RMD starting age has moved from 70½ to 72 to 73, and is 75 for anyone born in 1960 or later. A model trained on older material may give any of those.
• Last year's limits. 401(k), IRA, HSA and gift-tax limits, the standard deduction and the Medicare premium all change most years.
• State rules generalized. Whether your state taxes Social Security, pensions or IRA withdrawals varies widely. A national answer may not apply where you live.
• Invented sources. A citation to an IRS notice or a study that does not exist, or a real one quoted with the wrong number.
• Arithmetic in prose. Compound growth, tax across brackets and multi-year projections are more reliable in a spreadsheet or calculator than in a paragraph of generated text.

Only partly, and less than the marketing suggests. A tool does not feel fear in a crash or greed in a bubble, and it will give you a calm list of historical drawdowns when you are tempted to sell everything. That is valuable.

But chatbots have a bias of their own: they tend to agree with the way a question is asked. "Isn't it smart to move to cash before the election?" will often get reasons to do it. "What are the risks of moving to cash before the election?" will get the other side. The emotion is still yours; the tool can amplify it.

What actually removes emotion is a decision made in advance: a written investment policy with your target allocation, rebalancing bands and a withdrawal rule, set when markets are calm. AI can help you draft that document. It cannot make you follow it. Our asset allocation guide and allocation worksheet are a place to start.

Anything that would let someone open an account or move money in your name. Assume that what you type into a consumer AI service may be stored, reviewed or used to improve the service, unless its settings and terms say otherwise.

• Never share: Social Security numbers, account and routing numbers, passwords and security answers, full dates of birth, Medicare numbers, or scans of IDs.
• Redact before uploading: remove names, addresses and account numbers from statements and tax returns. Often round numbers are enough ("about $1.8 million in IRAs, $600,000 taxable").
• Check the settings: whether conversations are used for training, how long they are kept, and whether you can delete them. These differ between services and between free and paid plans.
• Prefer the tool you already trust with the data: an assistant inside your brokerage's secure site is covered by that firm's privacy policy and security. A browser extension from an unknown company is not.

Match the effort to what is at stake. A quick explanation of a term needs little checking. A decision that is permanent, such as a Roth conversion, a pension election, a Social Security claim or an annuity purchase, needs the primary source and usually a professional.

A five-step routine covers most cases: ask for the source; open it yourself; confirm the year; recompute any figure in a calculator; and for anything above a few thousand dollars or anything permanent, run it past a professional. Our free RMD, Roth IRA, Social Security and tax bracket calculators use current-year figures and show their working, which makes them a good second opinion on a chatbot's arithmetic.

Be most wary when someone uses "AI" to sell you something. In March 2024 the SEC charged two investment advisers, Delphia and Global Predictions, with making false claims about their use of AI; they paid $400,000 in combined penalties, and the SEC chair called the practice "AI washing" (SEC, 2024). Those were registered firms overstating what their software did. Outright fraud is far larger.

The FBI received more than 22,000 complaints mentioning AI in 2025, with $893 million in reported losses. People 60 and older filed 3,143 of those complaints and reported $352 million of the losses (FBI IC3, 2026). The SEC, FINRA and state regulators jointly warn about scams that claim AI-driven returns, and about cloned voices and deepfake videos used to impersonate family members, executives and well-known investors (Investor.gov).

Real AI tools help you analyze. They do not produce risk-free returns. Our investment scam red flags guide includes a ten-minute check of any seller on BrokerCheck and the SEC's adviser database.

My Finance Platform is a set of free calculators and guides, and a free email newsletter, for people near or in retirement. There is nothing to buy and no investment product to sell.

They are built around the problems described above. Each calculator shows the calculation behind its answer, not just the answer; the guides use the current year's IRS, SSA and Medicare figures and cite where each comes from; and both say plainly when a question needs a CPA, an estate lawyer or a fee-only planner. Use them to check a number a chatbot gives you, or to go into a meeting with your adviser with your own figures in hand.