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Benefits September 2, 2025
How Close Are Sponsors to Using AI for Plan Personalization?
Employers are warming up to artificial intelligence in retirement planning, but its use remains in the early stages.
Reported by James Van Bramer
Art by Alex Eben Meyer
Artificial intelligence has swept across industries, captivating business leaders and fueling market optimism. Yet, for all the hype and investment, many companies are still figuring out how to integrate AI into their operations in practical, meaningful ways.
“Everyone loves to talk about AI these days,” says Adam Sokolic, COO of retirement and private wealth for Hub International. “It’s the new buzzword.”
Despite the buzz, the tension on implementing practical use of the technology is especially evident in retirement planning, where plan sponsors—often cautious about adopting new tools—are slowly shedding skepticism. A July survey by Escalent of more than 1,300 plan sponsors found that two-thirds of those managing at least $100 million in assets are optimistic about using AI-driven virtual assistants to answer common retirement questions. Many also see potential for AI to deliver more personalized retirement planning experiences for employees.
In May, Hub International, which offers retirement planning services, integrated TIFIN @Work’s AI platform to provide AI-powered financial guidance to plan participants across the more than 9,400 retirement plans in its retirement and private wealth practice.
But the goal is not just efficiency, says Matt Escalante, senior vice president of HUB FinPath Financial Wellness. It’s about having relevance in workers’ retirement plans by helping employees during critical life events, by helping them find ways to save, or to find avenues for paying down debt.
“If you’re spending $12 everyday commuting, but you have a commuter benefit from your employer, we can detect that using AI and suggest considering that benefit and apply savings to your debt pay-down or savings strategy,” Escalante says.
Addressing a personalized need, such as a commuting expense, is just one example of how AI can be used to personalize retirement savings.
In fact, several AI retirement planning tools already exist. Mezzi, an AI-driven wealth management company that works with individual investors, uses an AI platform that offers insights meant to refine portfolios and optimize tax strategies. Empower’s Retirement Planner offers a similar solution by providing tailored retirement strategies and real-time portfolio management using AI for individual investors. Also, financial planning platform Boldin uses AI to navigate retirement planning complexities and compare scenarios such as making a change to expected retirement age.
Though many of the solutions are geared toward individual investors, they can work for retirement plan participants. Even so, personalized retirement planning powered by AI is in its infancy, and plan sponsors are hardly early adopters of the shiny new tool. But the possibility of tailoring strategies to individual needs—income, expenses, risk tolerance and long-term goals—while keeping planning simple and accessible is becoming an increasingly feasible solution.
What AI Can and Can’t Do
Boldin founder and CEO Steven Chen says his company’s inspiration came from watching his mother navigate retirement planning. He designed Boldin, whose clients consists of roughly half individual investors and half employers, to act like “TurboTax for financial planning,” focusing on AI’s current strengths.
“AI can help personalize things, guide you through this process, support you, and answer questions,” he says. “What AI is not always good at right now is math. That’s why we focus on the fundamentals using traditional methods—taxes, expenses, income and savings —and provide support using AI.”
Chen says personalized retirement planning has potential to develop further but emphasizes that AI is not a catch-all solution. Advisers, for example, still play an essential role in protecting retirees from making brash investment decisions that could be damaging to their portfolios, especially during market volatility.
“One bad decision, like losing a million dollars a day trading when you don’t need to, can derail everything,” he says. “People are emotional creatures and often make poor strategic decisions especially when the stock market is volatile and they are watching their net worth swing around wildly. This is when having access to an objective financial adviser to talk to has a huge amount of value. They can talk you off the ledge.”
Are Personalized TDFs Far Off?
One potential breakthrough—though still far off—is AI-driven personalized target-date funds. The popular investment vehicles already remove much of the guesswork for participants, but experts believe AI could refine them further.
David Blanchett, managing director, portfolio manager and head of retirement research at PGIM, says AI could take TDFs beyond their one-size-fits-all approach by incorporating individualized data such as expenses, risk tolerance and savings patterns into an individual’s unique glidepath. The more factors a participant could provide, the higher the likelihood they would receive investments that best fit their retirement goals and needs, he says.
“AI allows for an open-end perspective when comprising your portfolio, where it can use whatever information you can give it that could potentially affect the portfolio,” Blanchett says.
In other words, an AI-driven personalized TDF would likely work a lot like a managed account. But according to David Levine, a partner at Groom Law Group who advises plan sponsors, advisers and other service providers on retirement issues, whether adding a chatbot, using AI to make business operations more efficient, or hoping to personalize investments, plan sponsors must carefully weigh the costs and benefits.
“A lot of the personalized TDF solutions are like a personalized managed account,” Levine says. “If you like managed accounts, maybe AI-powered personalization is a good fit for you.”
Still, plan participants themselves remain hesitant on AI, let alone plan sponsors. In a recent AllianceBernstein survey, more than half of plan participants who responded to the survey said they would rely more on a human financial adviser than on AI.
Perhaps unlike some other industries, AI’s role in retirement planning and plan design will continue to be slow and steady. Regarding AI-powered personalization, the process could be even more gradual. But experts agree that integrating AI should ultimately be about enhancing—not replacing—human guidance.
And ultimately, like any other plan decisions, plan sponsors should ensure that the use of AI enhances their retirement plans and benefits participants. They should follow the same process they would for adding other products to fulfill their fiduciary duties, he says.
“Plan sponsors should say ‘Does this add value? Does it not?’” Levine says. “Especially if you’re being asked to pay for it. Because if it doesn’t add value. you are still left paying for it.”
