It’s early days, but AI will bring new efficiencies and personalization to your workplace retirement plan.
Faisal Hoque, a technologist and author of Transcend: Unlocking Humanity in the Age of AI says some employers have begun to deploy these features, although there’s still significant potential for growth.
“In many 401(k) plans today, AI tools personalize savings recommendations based on each person’s income, goals, and risk tolerance — making it easier for people to make better financial decisions,” he explained. “Over time, these tools will get even smarter, automatically adjusting contributions and investments to help people stay on track.”
RISKS
“These AI tools can simplify complex financial decisions, offer real-time insights, and personalize recommendations in a way that many people wouldn’t get otherwise. That kind of support can be a game changer, especially for workers who don’t have access to financial advisors,” Hoque said.
However, Hoque warned that while AI tools may become effective sources of aid, they’ll live up to that potential only if designed responsibly.
“Technology is only as good as the intention and ethics behind it,” Hoque said. “If these tools are built with transparency, fairness, and human well-being in mind, they can absolutely help people make smarter, more informed choices about their retirement. The key is to make sure AI is used to empower, not overwhelm or manipulate.”
Some specific risks that Hoque said to be mindful of include:
- Over-reliance, or placing too much trust in algorithms without a full understanding of how decisions are being made.
- Bias that’s baked into the data that causes AI tools to make recommendations that don’t serve everyone equally.
- AI tools that end up prioritizing profits or efficiency over what’s actually best for individuals.
“While AI can be a powerful guide, users should always stay informed and ask questions. Remember, no algorithm can fully replace human judgment when it comes to your financial future.”
[Source Photo: Getty Images]
Full article @ Kiplinger.
