AI IRL Podcast Episode 9: How an AI App Will Get You Retirement Riches
If you’re like most people, planning for your retirement is right up there with do-it-yourself root canal surgery.
What if there was a way to make your retirement planning as easy as ordering an Uber?
Once you linked your various accounts to it, this app would look at where you are in life, your location, your employer’s retirement options, your daily spending habits, and would devise a simple, automatic retirement plan.
Perversely, while more people are living longer, fewer are planning for their financial futures.
”One in three Americans today have $0 dollars in their retirement account.” –Sunil Gangwani
Gangwani’s main concern is about the younger population. “Forty percent of the millennials haven’t even started thinking about their retirement because they’re entangled in student loans and credit card debt.”
Removing Barriers to Entry
While there are many storefront financial advisors out there, getting started with one is a laborious process.
“We want to take the complexity from the process, of spending hours and hours with financial advisors who want all kinds of paperwork from the users,” says Gangwani.
Instead of the mountain of paperwork that most financial planners require to get started, Plootus can get going with a few clicks linking your various accounts.
You don’t have to enter any data by hand. Plootus can see your entire financial life.
“Every time you swipe your card, all of the expenses will inform the algorithm, the AI of our model, and then recalculate the number that is required for achieving a great retirement,” says Gangwani.
”Don’t save what is left after spending; spend what is left after saving. –Warren Buffett
Where You Are in Life
Clothes look best when they are tailored specifically to you. Financial planning is the same.
The Plootus app is is designed to your individual circumstances.
“How much do you really need for retirement? For a person living in Boston versus Idaho, the cost of living is very different,” says Gangwani. “And we spend very differently. A person making $50,000 may spend $30,000 a year. Another guy may spend $60,000 by borrowing money.”
Once you connects your credit cards, bank accounts, and any retirement accounts to Plootus, the algorithm actually understands your spending habits and adjusts its financial plan based on your location, retirement goals, and how much progress you have made so far.
Taking all these into account, the AI recommends how much you should contribute to various retirement accounts to reach your desired retirement goal amount.
If your employer matches retirement contributions to the 401k, the app will recommend how much you should have deducted from your paycheck to go into that account.
What makes this app special is its ability to make recommendations based on your individual current circumstances and your specific retirement goals. Not every 25-year old needs to have an aggressive investment strategy.
Plootus can help examine your spending to discover how transferring the money from your daily Starbucks latte habit would impact your retirement account 20 years from now.
“Contributing $50 from every paycheck, even if we’re not maximizing, goes far in terms of adding to your retirement assets. It is unbelievable.” –Sunil Gangwani
Analyzing Your Investment Options
Many employer-based retirement plans offer 30-40 investments from individual stocks (such as discounted company stock) to mutual funds to bonds or bond funds.
“We analyze those options and pick the best performing, both in terms of the fees and returns,” says Gangwani.
The app will optimize that universe of fund options to find the best individual asset allocation plan for your goals.
“We want every person to live in retirement where they want. They should be able to achieve that goal no matter what.” –Sunil Gangwani