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Essays on “Impact of AI on Retirement Professionals and Retirees”—A Summary

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By Hal Tepfer

The Society of Actuaries Aging and Retirement Strategic Research Program Steering Committee issued a call for essays to explore the impact of artificial intelligence (AI) and large language models (LLM) on retirement professionals and retirees. The objective was to gather various perspectives and experiences with AI and LLM in different retirement settings, both now and in the future.

In August 2024, the SOA published the essays and awarded prizes to three papers.

A summary of each of the papers follows:

  • [Prize winner] “The Retirement Reckoning” by Stefanos Orfanos presents a compelling fictional narrative about the Johnson family’s struggle with retirement decisions. The story centers on Michael, who faces severe health issues; his wife, Kathy, who is burdened with caregiving responsibilities and her own health concerns; and their daughter, Sarah, who resists the idea of change. Through their journey, the essay illustrates the complexities of using AI for retirement planning, showing its potential to provide quick solutions and its limitations in understanding the nuanced emotional and practical aspects of such life-changing decisions.

The narrative skillfully demonstrates how AI can be manipulated to provide desired answers, as seen when Sarah attempts to use it to support her preference for maintaining the status quo. It also highlights the importance of human financial advisors in providing context and considering factors that AI might overlook. Ultimately, the story underscores the need for a balanced approach to retirement planning that combines AI insights with human empathy, professional advice, and a thorough understanding of individual circumstances.

  • [Prize Winner] “Can Artificial Intelligence Help Me with Retirement Planning?” by Anna M. Rappaport provides an in-depth exploration of AI tools like ChatGPT and their potential role in retirement planning. Through conversations with ChatGPT, Rappaport tests the system’s capabilities in providing financial advice and performing calculations. She observes that while AI can offer quick and sometimes helpful information, it also has significant limitations, including the potential for incorrect calculations, incomplete advice, and an inability to comprehend complex individual situations fully.

The essay emphasizes the need for human oversight and expertise when using AI for retirement planning. Rappaport points out that AI’s responses can vary greatly between conversations and that the system cannot apply professional judgment or adhere to regulatory requirements. The author concludes that AI tools like ChatGPT can be useful for general information and as a starting point for discussions. However, they should not be relied upon for critical financial decisions without proper verification and professional guidance.

  • [Prize Winner] “A Retiree’s Guide to Artificial Intelligence Risks” by Gregory Whittaker provides a comprehensive overview of AI-related risks facing retirees, focusing on financial fraud. The essay discusses emerging threats such as deepfakes, voice cloning, and sophisticated targeting techniques cybercriminals use. The author explains how these AI-powered tools can be used to create convincing scams that target retirees, potentially leading to significant financial losses. He also touches on the broader societal implications of these technologies, including their potential to erode trust and manipulate public opinion.

In response to these risks, a range of mitigation strategies are offered. These include developing critical thinking skills to recognize manipulated content, verifying the authenticity of information before sharing, and supporting robust authentication systems. The essay emphasizes the importance of digital literacy among retirees and suggests that retirement preparation programs should include internet and social media safety training. The author concludes that while AI presents new and evolving challenges for retirees, awareness and proactive measures can help them navigate these risks effectively and safely enjoy the benefits of technology in their retirement years.

  • “Pick a Payout Using AI” by John Blocher presents a fictional conversation between a retiree and an AI assistant named Claire about annuitization options. The dialogue demonstrates how AI could provide detailed, personalized information about complex financial products. Blocher argues that such AI systems could offer superior customer service compared to human agents, potentially leading to better-informed decisions about retirement income options.
  • “Artificial Intelligence and Retirement Planning” by John Cutler explores how AI can assist retirees in managing their financial future. It discusses various AI applications in retirement planning, including personalized advice, investment management, and fraud detection. The essay also addresses AI’s potential risks and limitations in this context, emphasizing the need for a balanced approach that combines AI capabilities with human expertise.
  • “The Impact of Artificial Intelligence on Financial Decisions for Retirees” by Mark Dennis examines how AI is reshaping the financial landscape for retirees. It discusses the potential of AI in enhancing financial literacy, decision-making, and inclusivity for older adults. The essay also explores ethical considerations and accessibility issues surrounding AI use in retirement planning, emphasizing the need for responsible technology deployment and regulatory oversight.
  • “Artificial Intelligence as a Partner for Retirement Professionals” by Anna M. Rappaport discusses the potential role of AI as a tool for retirement professionals. Through an exploration of AI’s use in health care and a conversation with ChatGPT, Rappaport examines how AI might be applied in retirement planning and management. She concludes that while AI can be a valuable partner for professionals, it cannot replace human judgment and responsibility, particularly in areas requiring professional certification or signatures.

All papers and additional information can be found here.

Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the newsletter editors, or the respective authors’ employers.

Hal Tepfer, FSA, EA, MAAA, is the director of the Boston University MS in Actuarial Science program. He can be contacted at hal@bu.edu.