As retirement advice becomes more automated, human interactions remain every bit as important.


Though Robocops and other science fiction fantasies have failed to materialize in real life, robo advisors are very much among us, and are more than adequately equipped to give us humans sound investment and saving recommendations based on the data we provide.


But are there times when our complex, messy human lives need advising beyond the scope of a number-crunching algorithm? Short answer: Absolutely!


Hereʼs my take on when robo advisors work best, and when your finances could benefit from some good old-fashioned handholding.


Why I love robo advisors

  • They give you a quick snap shot of your retirement. Approaching the magical milestone of 59½ (the age you can start making penalty-free withdrawals)? Rather than compare flight and hotel prices on travel websites, go compare your retirement income fantasies to some actual projections with an online Retirement Advisor.
  • Available 24/7; no judgment. Feel like consulting a robo advisor at 3 a.m. on a Sunday in your PJs? No problem! And, since your information is saved as you go along, you can input your details at your leisure and come back for your tailored plan at any time.
  • Quick and clear action plans. With the aid of a colorful bar chart, your retirement income goal will be visually represented alongside your actual situation. If thereʼs a gap, TIAAʼs Retirement Advisor will propose an action plan, a new strategy, to fix that shortfall (maybe save more per month, reallocate your assets).


Why your retirement plan still needs that human touch
While a robo advisor may be infinitely superior in terms of computational speed and accuracy, a human advisor is more likely to tease out (and thereby account for) certain nuances. Like the fact youʼre frugal to a fault and donʼt even spend half your pre-retirement income, never mind post- retirement. Itʼs also important to be aware of the broad assumptions underlying most online tools and calculators. Knowing you and your family on a more personal level can help a flesh-and- blood advisor craft a more personalized plan.


The main role of a robo advisor, as I see it, is to identify the disparity between your projected retirement income (based on facts) and your imagined retirement income (often based on fantasy). This lays the groundwork for, say, a free one-to-one advice session with a financial consultant. Now, with all of your vital stats gathered in advance, you can go in with more confidence, and be better positioned to get the most out of your allotted time.


Machines and humans working together
Robo advisors such as TIAAʼs Retirement Advisor can be a perfect starting point for those who have a healthy amount saved up, perhaps even a company pension, providing a financial picture that may also to some extent be based on wishful thinking. We all have a tendency to build castles in the air—but how many of our airy ideas about retirement income are backed up by cold hard numbers? Robo advisors can provide basic answers but are designed to set the stage for—rather than upstage—the work of a professional consultant.






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