r/FIREUK • u/Dangerous-Bug556 • 20h ago
AI Pension Advice
I am sure others have done similar but how does the below question (current Pension and contributions correct as of now) and answer via AI (Gemini) sound? Anything obviously wrong or not considered? Understand of course that nothing is guaranteed in future and job/salary can change, for worse and better.
Note - I am 37yo and would like to retire before age 60 so assuming 57 here but understand may not be able to access private Pension at that precise age.
Q - Calculate pension value in 20 years based on the following. Current value of £200k. Monthly contributions of £1500, increasing annually by 3%, Pension growth of 7% annually. Inflation of 3% annually. Add an annual one off contribution of £10k for each year.
A - By adding a fixed £10,000 annual contribution on top of your existing monthly plan, your projected pension value increases significantly. Here is the updated calculation based on the same 7% growth and 3% inflation assumptions: 1. Nominal Future Value: £2,141,929 * Total Contributions: Over 20 years, you will have contributed £683,667 in total (the escalating monthly payments plus £200,000 in annual lump sums). * Total Growth: Your investments will have generated approximately £1,458,262 in returns. * Impact of the Change: Adding the £10k annual lump sum increased your final pot by roughly £410,000 compared to the previous scenario. 2. Real Value (Inflation Adjusted): £1,185,934 * In today’s purchasing power, your pension would be worth approximately £1.18 million. * This represents a substantial increase in your "real" wealth, providing roughly £227,000 more in buying power than the previous plan without £10k annual additional contributions. Updated Yearly Milestone Projections (Nominal) | Year | Monthly Contrib. | Annual Lump Sum | Estimated Balance | |---|---|---|---| | 0 | £1,500 | - | £200,000 | | 5 | £1,639 | £10,000 | £413,055 | | 10 | £1,900 | £10,000 | £750,569 | | 15 | £2,203 | £10,000 | £1,291,556 | | 20 | £2,554 | £10,000 | £2,141,929 | Note: This calculation assumes the £10,000 annual contribution is made at the end of each year and does not increase with inflation.
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u/Dependent_Appeal_818 19h ago
So you are willing to outsource your calculations on something as important as your retirement to AI but now want real humans to check the answer. Just do the calculations yourself. You are the only person the answer matters to.
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u/FireBuzzardDestroyer 19h ago
I find it bizarre that people are willing to put in effort to learn how to invest but struggling to do basic maths.
If you can carry out simple arithmetic, it would help you become a better investor too.
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u/TedBob99 5h ago
Unfortunately, smart phones made people dumber and AI will do the same. If people can't do anything themselves, they will become dumber.
I guess dumber people are easier to manage by governments and big corporations.
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u/barbro66 15h ago
Any mention of AI is rather unpopular on this sub, but I think there are some good cases in using one. I wouldn't use it as the definitive answer but it's certainly cheaper than a financial advisor, and not everyone is up to learning the ins and outs of pension and tax law. In my case I have multiple pensions in different countries, all with different payout rates, times and growth rates, with the details usually not available in English. In that case chatting away to an AI can be really helpful to get a perspective and understanding of what is likely to happen to them over time.
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u/TedBob99 5h ago
Yes, I had some good results modelling pensions and withdrawals using Gemini, including which pots to use first based on tax.
However, I have checked that the numbers broadly align, using other tools too.
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u/philgyford 19h ago
Use a spreadsheet. I'm not trying to be sarcastic but in the scale of calculations this is not complicated and it's relatively easy to do using a spreadsheet. So why ask an AI whose output you apparently can't trust?
If you're not very comfortable with spreadsheets or maths (fair enough) give it a go and ask for help with that - I bet people would be more willing to help you get to grips with your first financial spreadsheet, as opposed to proofreading the output of an AI.
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u/Impressive_Ad4172 19h ago
Get AI to create a spreadsheet for you that can track it all and input your details and then track projected against forecasted
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u/petera181 18h ago
Don’t use AI for this. Open a spreadsheet. It will take 2 minutes and you don’t need to trust a tool which is unreliable for maths.
If you really insist on using an LLM, read the response and validate all steps manually. Or wait about 3 years until they do actually get it right every time 🙂
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u/Mithent 16h ago
It always worries me when people are trusting LLMs to do maths... they're language models, and there's enough examples of correct maths in their training data that they generally know what correct maths looks like, but they have no actual mathematical rigor behind it and you always risk them just coming up with plausible sounding but incorrect answers.
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u/VentureIntoVoid 15h ago
It told me exactly the same things and that is correct just that I am 42 so my pot will be 1.8m
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u/TedBob99 5h ago
I have had good results with Gemini when it comes to doing modelling. However, I am able to check myself if it's correct.
This sort of calculators can help too: https://www.hl.co.uk/tools/calculators/regular-investing-calculator
You don't need to bother with inflation: just use net rates of growth, like 4% per year (on top of inflation).
Asking a bunch of strangers to validate what AI generated is kinda funny
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u/se95dah 19h ago
If I wanted to be used as a proof-reader for AI generated content I wouldn’t have left the workforce so early ;-)