AI Tools for Retirement Planning: Do They Actually Work?

Half of Americans aged 55 to 66 have zero retirement savings. AI retirement planning tools promise to fix that — at a fraction of the cost of a human advisor. The honest answer is that some of them genuinely deliver, and some of them dress up a basic calculator in a smart-looking dashboard.

We tested the top platforms and separated both.

The Retirement Planning Gap AI Is Trying to Fill

Traditional retirement planning has a pricing problem. A certified financial planner typically charges $200–$400 per hour, or 1% of assets annually. For someone with $80,000 saved, that 1% fee represents $800 per year — a meaningful drag on compounding returns over decades.

AI tools that replace traditional advisors can save investors over $1 million in fees over three decades — and that figure compounds into a dramatically different retirement outcome.

How AI Retirement Tools Work Under the Hood

The best AI retirement tools do three things that generic calculators cannot. First, they connect to your actual accounts — pulling in real balances, real contribution rates, and real investment allocations. Second, they run probabilistic simulations — projecting thousands of possible market scenarios rather than assuming a single fixed return rate. Third, they update continuously — adjusting projections as your behavior and market conditions change.

The Best AI Retirement Planning Tools in 2025

Empower (formerly Personal Capital) — Best Free Option

Empower is currently managing $290 billion in assets for 1.3 million customers and offers highly tailored retirement strategies powered by AI, using interactive visuals to illustrate retirement scenarios.

What makes Empower genuinely exceptional is the combination of breadth and price. The core planning tools — retirement planner, fee analyzer, investment checkup, net worth tracker — are completely free. Empower automatically syncs checking, savings, credit card, loan, investment accounts including 401(k) and IRA, and even mortgage accounts.

The fee analyzer is uniquely valuable: it scans every account you’ve connected and surfaces hidden investment fees that most people have no idea they’re paying. Many users discover they’re losing thousands annually to fund expense ratios they never reviewed.

Limitation: The managed investment service requires a $100,000 minimum and charges 0.89% annually. Expect periodic calls from Empower advisors pitching their wealth management services.

→ Start with Empower’s free retirement planner — no minimum required

Betterment — Best for Automated Retirement Investing

Betterment uses Monte Carlo Simulations with 95% confidence intervals to forecast future retirement outcomes, combined with dynamic rebalancing that ensures your portfolio stays balanced without requiring manual oversight.

At 0.25% annually with no minimum investment, Betterment makes sophisticated retirement investing accessible to anyone starting out. Two-Way Sweep Technology — Betterment’s feature that identifies surplus cash in your accounts and invests it automatically — is the kind of behavioral nudge that genuinely improves outcomes for most users.

As your retirement date approaches, the allocation gradually shifts from growth-oriented to income-oriented automatically — a process called a glide path.

Limitation: Betterment is an excellent accumulation tool but provides limited guidance for the decumulation phase.

→ Open a Betterment retirement account — 0.25% annually, no minimum

NewRetirement (Boldin) — Best for Detailed Scenario Planning

For users who want to go deep into the numbers — modeling Social Security claiming strategies, healthcare cost projections, Roth conversion sequences, and estate planning scenarios — Boldin is the most comprehensive tool available. No other AI tool comes close to the depth of analysis it provides for anyone within 10 years of retirement.

What You Should Actually Do — By Life Stage

In your 20s and 30s: Open a Betterment IRA or set up automatic 401(k) contributions. Connect your accounts to Empower’s free dashboard. Set a contribution rate of at least 10% of gross income and increase it 1% per year.

In your 40s: Run Empower’s fee analyzer immediately — hidden fund fees in a $200,000 portfolio can cost over $100,000 in compounding over 20 years. Model your Social Security scenarios. Stress-test your plan against a 30% market decline.

In your 50s and beyond: Move beyond pure robo-advisors. Consult a fee-only CFP for a one-time comprehensive review. Model your healthcare costs separately — they are almost always underestimated.

Where AI Retirement Planning Falls Short

The decumulation problem. Every major AI retirement tool excels at accumulation but is significantly less useful at the distribution phase — figuring out which accounts to draw from first, Roth conversions, required minimum distributions, and Social Security timing. These are the highest-stakes decisions, and they’re exactly where most AI tools are weakest.

Healthcare cost uncertainty. No AI model can accurately forecast your healthcare costs in retirement. They can plug in averages, but individual health trajectories vary enormously.

Behavioral failure is still your problem. The most sophisticated AI retirement planner produces zero value if you reduce contributions during a market downturn or access retirement funds early.

The Report Card

AI retirement planning tools in 2025 are genuinely useful — particularly in the accumulation phase. Empower’s free tools are among the most valuable free financial products available anywhere. Betterment’s automation makes consistent long-term investing easier than any manual approach.

The honest limitation is that AI cannot replace human judgment for the decisions that matter most: the complex tax sequences, healthcare cost strategies, estate coordination, and behavioral coaching. Think of the best AI tools as a foundation, not a complete solution.

Frequently Asked Questions

Is Empower’s free retirement planner actually free?
Yes — fully free for the planning and tracking tools, including the retirement planner, fee analyzer, investment checkup, and net worth tracker. Empower makes money if you choose to use their paid wealth management service.

How accurate are AI retirement projections?
More accurate than spreadsheet estimates, less accurate than people assume. AI tools use Monte Carlo simulations and real account data, but they cannot model unexpected health costs, career interruptions, or the specific sequence of market returns you’ll experience.

At what age should I start using AI retirement planning tools?
Immediately, regardless of age. The earlier you connect your accounts and understand your trajectory, the more time you have to course-correct.

Should I use a robo-advisor or a human advisor for retirement?
Both, sequentially. Use a robo-advisor like Betterment during accumulation. Add a human advisor for a comprehensive review every 3–5 years and at major life transitions.