I Asked ChatGPT and a Financial Advisor What I Needed To Do To Retire Early: Here’s Where They Disagree
As more people use ChatGPT and other generative AI programs for retirement planning and other financial decisions, it's worth exploring how helpful these tools really are.
We created a scenario and asked ChatGPT how a 35-year-old professional with a $70,000 yearly income and a home mortgage, who is already maxing out their 401(k) account, could retire at age 55. Then we asked Jacob Tally, financial advisor at Prospero Wealth, what the AI program got wrong in its projections.
Didn't Ask Questions
"The prompt is a good approximation of what somewhat might ask," he said. "So, ChatGPT ran with it and never stopped to ask any clarifying questions."
That's the first difference between a financial advisor and an AI platform.
"A proper financial plan includes a number of other areas beyond just investments: Insurance, estate planning, tax planning, goals, health considerations, family considerations, and risk tolerance," Tally said.
Without these kind of details, it's virtually impossible to come up with a workable plan. ChatGPT's assessment had several major gaps.
Didn't Account for Risk Tolerance When Discussing Asset Allocations
ChatGPT mentioned a heavy stock allocation for the person's portfolio in their 30s or 40s, which sounds like conventional advice.
"But it also assumes 7% returns over the life of the plan [and] offers no guidance for how or whether that allocation should change over time," Tally pointed out.
Inaccurate Modeling for Actual Retirement Costs
ChatGPT predicted that the individual would need a portfolio of $2 to $3 million for early retirement. It followed the 4% withdrawal rule, leading to an income of $80,000 to $100,000 per year in retirement. That amount doesn't account for inflation.
Plus, Tally said, "The 4% rule... was built for a 30-year period, and this client's retirement period is likely closer to 40 years. It also ignores the sequence of return risk; what if the market drops 30% right before their planned retirement?"
Ignored Healthcare Costs
ChatGPT also grossly underestimated healthcare costs at $6,000 to $12,000 in 2026 dollars.
"Unsubsidized plans for people aged 55 to 65 today start (not end) at $12,000 per year and go up to $20,000 or more depending on coverage. On top of that, healthcare inflation rates historically have run much higher than Core PCE," Tally said.
Unrealistic Projected Savings Rates
Unlike a human finance expert, ChatGPT didn't question the claim that the individual was already maxing out their 401(k) plan on a salary of just $70,000.
"That's a 35% savings rate," Tally said. "That's amazing! The client should be congratulated on such fiscal discipline."
A financial advisor would think to question that claim to determine whether the funds were coming from unreported income, side gigs or parental help, and what that might look like for the future.
"Each of those branches leads somewhere totally different," Tally said.
No Real Roadmap for Early Retirement
ChatGPT called a plan to retire at age 55 "doable, but not automatic." Without further, real details, it would be hard for a financial advisor to say the same.
"The biggest issue is that ChatGPT's plan basically boils down to 'just increase your income and save more.' That's honest, but not helpful," Tally said.
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