ChatGPT Suggested a Retirement Spending Plan — and a Retirement Planner Reviewed It
You've grinded and stacked income streams to get here. Now you're sitting on $2.5 million. So, what's the retirement move?
In an effort to figure it out, I handed the following prompt to ChatGPT 5.3: “Think like a financial planner and create a retirement spending plan for someone retiring at age 65 with $2.5 million.” Then I ran the output past a real retirement planner to see where it held up — and where it fell apart.
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ChatGPT’s Initial Plan
The artificial intelligence (AI) started with a withdrawal rate in the 3.5% to 4% range, assuming 30 years of retirement from age 65 to 95.
ChatGPT said, “For a strong, balanced plan, I would start at around $90,000 to $100,000 per year, then adjust annually based on inflation, market performance, taxes and healthcare costs.”
It recommended budgeting $60,000 to $75,000 a year for core living expenses (housing, utilities, transportation, insurance). From there, it recommended $20,000 to $35,000 for discretionary spending (travel, gifts, hobbies, home upgrades) and $10,000 to $20,000 for healthcare.
As for where to hold assets, the chatbot proposed the bucket strategy. It outlined $100,000 to $200,000 held in a cash reserve, allowing for one to two years of spending in a market crash. Then it recommended three to five years’ expenses ($300,000 to $500,000) in conservative income funds. The rest it allocated to growth investments, and it summarized the portfolio as 60% equities, 30% bonds/fixed income and 10% cash.
For Social Security, it advised: “Use portfolio withdrawals from age 65 to 70. Delay Social Security until 70 if health and family longevity are good.”
On the tax side, it said “First, use taxable brokerage assets and cash, then use traditional IRA or 401(k) withdrawals strategically. Let Roth assets grow as long as possible.”
Feedback from a Financial Planner
Retirement planner John Davis of JKD Financial said the chatbot got a lot right as a high-level overview.
“The bucket strategy for spending is exactly how I suggest clients think about investing in retirement, and the tax framework is a solid starting point for deciding which accounts to tap first.”
But Davis noted the plan lacks nuance for an individual retiree’s needs and priorities. “Budget breakdowns vary widely; one retiree might have high core expenses while another wants to front-load travel and leisure," said Davis. "Social Security timing is also incredibly nuanced. While the AI suggests delaying, that might be a mistake depending on the person's health, longevity or marital status.”
His biggest complaint: the plan lacks actionable instructions. “There’s no recommendation for specific investments, no clear plan for rebalancing or asset location for tax-efficient investing. On the tax side, it misses ‘cliff’ risks. There’s no mention of specific tax bracket targets or how these distributions might accidentally trigger higher Medicare premiums via [Income-Related Monthly Adjustment Amount (IRMAA)] brackets.”
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Refining the AI Retirement Plan
I went back to ChatGPT and gave more details about the person: “Refine this plan for a married person with no pre-existing health problems, who lives in a median-cost city in the U.S. and plans to do a lot of traveling in their early years of retirement.”
The chatbot offered a more nuanced spending plan based on the “go-go, slow-go, and no-go” phases of retirement. It proposed an annual spending budget of $120,000 to $140,000 from 65 to 75, making heavy withdrawals until age 70 then collecting $50,000 to $80,000 from Social Security.
ChatGPT recommended setting aside $150,000 to $250,000 specifically for the first five to seven years of travel. “That makes spending psychologically easier and prevents panic selling during market downturns.”
After age 75, spending slows as travel and lifestyle spending naturally slow.
For tax planning, the AI got more specific: “The ‘sweet spot’ years are often between ages 65 and 73 before required minimum distributions (RMDs) begin. Those years can be ideal for Roth conversions, harvesting gains strategically, keeping future RMDs lower and managing Medicare IRMAA thresholds.”
The Missing Human Nuances
Cody Schuiteboer of Best Interest Financial put it well: “The plan reads more like a chapter from an advanced personal finance textbook than a robust strategy.”
The facts and premises are all correct. But it’s knowledge without context.
A human advisor can talk through exactly where you currently hold which assets in which accounts. Then, they can tell you where and when to move each to minimize taxes.
The plan also missed a few crucial risks, such as the widow’s penalty. “When the first spouse passes away, the survivor must file as a single person, which drastically changes their tax bracket.”
Plus, human advisors can talk you off the ledge when you’re on the verge of panic selling. No AI can do that.
ChatGPT hit the highlights well, but it’s no substitute for sitting down with a human expert and having a detailed conversation. Personal finance is ultimately, well, personal.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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