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AI financial advice is surprisingly good, especially if you ask right questions

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Re: AI financial advice is surprisingly good, especially if you ask right questions

#401

Post by mmcnl »

Cthulhu_ wrote: post #336
mikeocool wrote: post #115

Earlier quoted context omitted.

Yeah, Claude told me what a great idea converting my LLC to an S Corp would be and how much I would save in taxes. When I asked my accountant about he told me it would actually cost me more, because of NYC taxes S Corps. I didn’t tell Claude I lived NYC, because it didn’t occur to me that it was relevant. I find tax stuff is full stuff like this (often more subtle than where you live).

I think this is the big gap in AI vs real people - they're focused on giving an answer, not asking questions. I've prompted AIs to ask me questions if anything was unclear or if important information was missing and it usually doesn't. Whereas financial advisors do.

Sooo true, AI never asks questions. It just makes up requirements. I think it's because the models are trained on benchmarks where task completion is an important metric. But I'd rather have it not finish a task and specify why than make up stuff along the way.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#403

Post by foxtrot8672 »

dmix wrote: post #5

I use YNAB ( https://www.ynab.com/ ) for budgeting so I already had all of my financial data in a single source. Exporting the CSVs locally and asking Claude to be my financial advisor legitimately gave me good advice. Not just nagging me to save more (which is always useful), but how to organize my budget categories better, detecting longer term spending patterns I wasn't thinking much about, researching credit card…

check out what we're building. this is 100% AI-native financial advice and planning software: https://pendragon.foxtrotcommunications.net/ we always appreciate any feedback

Re: AI financial advice is surprisingly good, especially if you ask right questions

#404

Post by fittingopposite »

francisofascii wrote: post #360
DonsDiscountGas wrote: post #65

Earlier quoted context omitted.

Lol. You don't even need AI for that 99% boiler plate. Save 6-12 months of expenses in cash, DCA the rest into total market stock index funds. But people still pay expensive advisors to get worse results.

The tricky part is which total market index funds? The S&P based ones are too AI focused, and don't give you the diversification they once did. You also don't want to invest in just one countries stock market. And bonds, should be a mix of maturity, governments (not just the US), corporate, etc.

VT and chill

Re: AI financial advice is surprisingly good, especially if you ask right questions

#405

Post by what »

spacefan1984 wrote: post #384
what wrote: post #209

Earlier quoted context omitted.

A child can not get a tax advantaged account. You need earned income to contribute to those.

If you track chores you can actually set up your kids with a Roth 401k. For example, this company takes care of it for you https://www.halfmore.co/

No. You can not consider payment for chores as earned income.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#406

Post by what »

pinkyboy wrote: post #192
what wrote: post #168

Earlier quoted context omitted.

Most people here are probably paid too much to contribute to a Roth IRA.

I have considerable Roth assets because my employer's 401k allows for the Mega-backdoor, which means I can put $30k+ per year of after-tax income into 401k (beyond the normal pre-tax contributions) perform a Roth-in-plan-conversion on the after-tax assets, and then roll it out into a Roth IRA.

You can’t personally contribute to a 401k beyond the limit, even after tax. Your employer can add extra via match or profit sharing contributions. What are you talking about?

Re: AI financial advice is surprisingly good, especially if you ask right questions

#407

Post by gloryjulio »

inigyou wrote: post #310
gloryjulio wrote: post #41

Earlier quoted context omitted.

Investing and trading is a dynamic game. If everyone has the edge of certain portfolio to out perform the average, then no one has the edge. Similarly AI is not going to solve that. Because everyone would end up with similar AI edge until no one has the edge. People should start with simple universal rules: Stay invested. Buy low cost diversified etf fund. Favor long term investment instead of trading. Learn somethin…

When everyone is crowding into one investment that investment tends to get irrationally over-saturated. With the current makeup of the S&P500 we can predict it will dramatically crash in real value in the next five years.

[dead]

Re: AI financial advice is surprisingly good, especially if you ask right questions

#408

Post by scrapcode »

BeetleB wrote: post #196
scrapcode wrote: post #152

Earlier quoted context omitted.

I never personally liked the blanket advice to "Max your 401k." For most, if achievable at all, that would be the most they can invest at all. Even though it is often recommended alongside a proper "emergency fund," that advice leaves little liquidity without major penalties.

I believe the general idea is to max it if you can. If you can't, put whatever you can, and forego luxuries like vacations until you can.

Right, so you max your 401k instead of diversifying a portion into something more liquid, and when something happens before 55 you have to take a major bite out of it just to access that money?

Re: AI financial advice is surprisingly good, especially if you ask right questions

#409

Post by scrapcode »

jeffreyrogers wrote: post #156
scrapcode wrote: post #152

Earlier quoted context omitted.

I never personally liked the blanket advice to "Max your 401k." For most, if achievable at all, that would be the most they can invest at all. Even though it is often recommended alongside a proper "emergency fund," that advice leaves little liquidity without major penalties.

Roth contributions are withdrawable without penalty. Also most employers offer a match of some amount, which is essentially free money.

I understand contributing at least the amount an employer will match, and almost always much more than that. But to "max" it would be $24,500/yr which for many if feasible at all would leave little go into different investment vehicles meaning all of your money is tied behind the rules of a 401k until you can access it, or take that 10% penalty.

Maybe I'm missing something here but diversification is a pretty fundamental investment rule and I'm not sure why the advice doesn't usually follow it here. Putting everything into a "you can't touch this until you're ~55+" bucket seems like quite a risk.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#410

Post by pinkyboy »

what wrote: post #406
pinkyboy wrote: post #192

Earlier quoted context omitted.

I have considerable Roth assets because my employer's 401k allows for the Mega-backdoor, which means I can put $30k+ per year of after-tax income into 401k (beyond the normal pre-tax contributions) perform a Roth-in-plan-conversion on the after-tax assets, and then roll it out into a Roth IRA.

You can’t personally contribute to a 401k beyond the limit, even after tax. Your employer can add extra via match or profit sharing contributions. What are you talking about?

For 2026, the 401k limits are $72,000 overall, and $24,500 for pre-tax employee contributions.

Assume an employer who matches 50% up to pre-tax employee contribution max, the result is this:

$24,500 pre-tax employee contribution $12,250 employer match

This leaves $35,250 to the $72k limit.

Roth MegaBackdoor enabled plans allow the employee to put $35,250 of _after tax_ contributions in to fill that window, and to convert them to Roth assets. They can even be rolled out into a Roth IRA while the 401k is still active.

I have no clue why you think this relatively common plan option is, somehow, impossible.

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