The Intersection of Fintech and Retirement Planning: A New Era

Much like every other aspect of the human experience, how we prepare to retire is changing. As humanity continues to push itself up the hill of history, developments in artificial intelligence and other financial technology have allowed individuals to enhance their financial lives.

These newly developed technologies provide several benefits to retirement planners and the financial professionals advising them. In this brief article, we will examine the various developments that fintech has brought to the world of retirement planning and how you might benefit from them. If you’re interested in preparing for retirement or curious about how these technological developments may benefit you, please read on. 

Automated Investments

The power of automation is being leveraged in many financial endeavors; retirement planning included. AI technology, mobile applications, and blockchain-based solutions allow retirement planners to automate their retirement savings. If you struggle to remain consistent with your retirement savings, this may be the solution for you.

 According to data produced by the World Economic Forum, struggling to remain consistent with retirement savings is a common problem among retirement planners. The studies concluded that automated savings technology could significantly boost savings rates by encouraging savers to make balanced, risk-appropriate decisions that automatically save and invest their income without any further action required on their part.

Naturally, this technology is highly recommended and has been widely implemented by retirement planners of every age. If you’re struggling to get started with your retirement planning, automation may be the solution that allows you to break through and begin your retirement journey.

Robo-Advisors – The Future of Retirement?

A relatively new addition to the financial tool kit is robo-advisors. For those unaware, robo-advisors are AI-guided software tools capable of providing financial advice that can help plan your retirement. Given that a significant portion of the population lacks the financial literacy necessary to appropriately plan for retirement, robo-advisors are a welcomed addition.

In short, robo-advisors use algorithms and artificial intelligence to advise individuals on optimal investment strategies for specific circumstances. Users of these advisors will be required to answer several personal questions relating to their financial goals and habits to provide the robo-advisor with sufficient data to make appropriate recommendations.

Although these robo-advisors are inarguably useful, their utility remains limited. As it stands, they remain unsuitable tools for more complex financial situations. It is still advisable to contact a financial professional if you require more tailored retirement planning advice. 

Cryptocurrencies – Retirement Planning or High-Risk Speculation?

With the creation of Bitcoin in 2009, a new frontier was discovered in the world of finance. Although cryptocurrencies remain highly controversial as investment vehicles, Bitcoin and other cryptocurrencies have become necessary considerations for many retirement planners.

Over the last few years, increasing numbers of corporations have included blockchain-based investments in their retirement planning strategies. Indeed, MicroStrategy recently became one of the first companies to allow their employees to add Bitcoin to their 401(K)s. This action was not an isolated event as other large investment companies like Fidelity Investments have similarly begun offering cryptocurrencies to clients hoping to plan for retirement.

Although Bitcoin and other cryptocurrencies are exciting investment opportunities, they remain highly volatile and speculative assets. As such, these investments may not be suitable for the risk appetites of many retirement planners. You should consult a financial professional before incorporating any assets in this class into your retirement planning strategy.  

Overall, automated investments, robo-advisors, and cryptocurrencies are the most significant benefits that fintech has brought to retirement planners. As technology continues to advance, we will likely continue to see further developments that yield benefits for retirement planners. We’ll keep you updated as things develop. Thank you for reading.