ChatGPT has its strengths and weaknesses, but one of the things it’s best at is compiling data from varying sources and presenting it in an easy-to-read fashion.
For example, if you’re planning your retirement and wondering just how much the average upper-middle-class retiree spends monthly at age 80, ChatGPT can be extremely helpful.
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Here’s a look at the data that the AI chatbot compiled when asked this question.
Average Upper Middle-Class Spending
To its credit, ChatGPT immediately acknowledges that “there’s no widely cited, specific data just for upper-middle-class retirees aged 80.” Thus, the remainder of its answer has to be categorized as conjecture — or as the AI bot calls it, “an educated estimate.”
Citing data from Investopedia, ChatGPT states that the average retiree household across the nation spends about $5,000 monthly. This includes major costs such as housing, food and healthcare.
In terms of strict middle-class spending, ChatGPT refers to data published by GOBankingRates suggesting that the average 80-year old spends closer to $4,200 per month.
Using that $4,200 to $5,000 per month average spend as a baseline, ChatGPT projects that for an upper middle-class retiree at age 80, the average monthly spend is likely in the $5,000 to $6,000 range.
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Retirement Planning Adjustments
ChatGPT astutely points out something that many retirees and even financial planners overlook: Namely, retiree spending typically declines with age, with notable decreases in travel and discretionary spending. This is because older retirees tend to become less mobile and/or have a greater desire to spend time at home. This information is backed by data published in the Journal of Financial Planning.
So, if you were trying to use this data as a baseline for your own retirement planning, understand that your spending is likely to decrease as you get older, such as age 80 and beyond. If you’re anticipating spending $6,000 per month in the first years after you retire, for example, that might decrease to $5,000 or less by the time you reach age 80.
Caveats
Although the data ChatGPT mined in this instance is accurate, in the sense that it comes from verifiable online sources, that doesn’t mean it necessarily applies to you directly.
Every retiree’s financial situation, goals and outlook are different, and using “averages” can sometimes be problematic. If you’re an upper middle-class retiree trying to live on Manhattan’s Upper East Side for $5,000 to $6,000 per month, for example, you’re likely to find yourself coming up short.
The point is that using ChatGPT to provide average spending data for an entire group of essentially unrelated people is more of an interesting exercise than an effort at personalized retirement planning.
The Bottom Line
Projecting retirement expenses is a notoriously difficult exercise, even on an individual level. Aggregate data, such as that compiled and projected by ChatGPT, can be a good first step. But when applying these principles to your own retirement, you’ll have to factor in specific choices you make as an individual, from the cost of living in the area you reside to your personal health needs, housing choices and overall discretionary lifestyle. As these are some of the most important calculations you will ever make in your financial life, it pays to work with a professional advisor and not rely on data assembled by an AI chatbot.
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This article originally appeared on GOBankingRates.com: I Asked ChatGPT How Much the Average Upper-Middle-Class Retiree Spends Monthly at Age 80 — Here’s What It Said
