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Can you trust AI for financial advice? Or would you lose it all?

Can Gen Z get ahead and retire early by putting financial trust in A.I.? Charles Schwab's Marci Stewart and The Heritage Foundation's Kara Frederick discuss with FOX News Digital.

Gen Z is applying their tech-savvy mentality to money-making decisions, but helping them reach their retirement age goal of 61 paints a murky investment picture.

"A lot of these young people now don't have as much to invest and to really afford to play with the risks," The Heritage Foundation Tech Policy Center director Kara Frederick told FOX News Digital. "The game has changed in so many ways. There might not be a lot to lose, but you could lose it all."

"Whether it's A.I. or a digital solution, it's really important to distinguish what you're trying to get from the tool that you're using. And I think a lot of workers and individuals, I feel like they skipped that step," Charles Schwab Communication Consulting and Participant Education director Marci Stewart also told Digital. "They go to the tool thinking it's going to solve the challenge, but maybe they don't really pinpoint the challenge."

An October study by the money management firm found that 75% of Gen Z respondents are comfortable asking artificial intelligence tools for help with financial planning. Additionally, Gen Z is optimistic that they’ll retire sooner than their elder generational counterparts, at an average age of 61.

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Both the financial and tech experts cautioned against fully trusting in a digital tool to help decide your next investment strategy move.

"I think technology, A.I. in particular, is extremely well-suited to parse through this type of data and identify patterns that help humans make good decisions," Frederick pointed out. "On the other hand… there's a temptation to trust the algorithm too much in these cases because you're dealing with things that are harder for your average human being to analyze."

"That fiduciary role might not be something in the account management, right? It isn't likely something that you're going to find through A.I. chat tools," Stewart added. "What's better: humans or technology? I think there's a lot of value in both. To me, it's the power of the ‘and,’ it's the power of being able to provide human support alongside technology solutions."

When weighing market and economic decisions, Frederick argued that A.I. bots are "not good enough yet," and often still make mistakes.

"There's some very famous cases of certain algorithms identifying issues in health care, and because the training datasets are too limited, it comes up with a different source of outputs that don't account for all of the atmospherics of, say, an individual," Heritage’s resident tech expert explained. "So I think there's a very long way to go when you're talking about tailoring specific advice to specific individuals and more the bespoke answers that are needed, especially in the financial field."

Regardless of age, the Charles Schwab study also reported that everyone is more confident accepting advice from a human versus a computer.

"Money is personal, and these are really big, emotional decisions. Big decisions for people to make, even for Gen Z who are digital natives, grew up used to technology," Stewart said. "The survey that we did told us that the top source of advice for finances is family and friends. So it sort of goes back to that power of the 'and,' and it goes back to people."

Frederick, a millennial herself, was "shocked" to learn that Gen Z wants to retire by 61, but the Charles Schwab director noted how it’s indeed an achievable goal.

"If anything, Gen Z is going to be working longer, not shorter, in order to get to retirement age, especially given the levels of student debt. The fact that it is very difficult to buy a house now, the American dream is receding before us," Frederick argued. "They're starting out, I would say, in a hole, to climb out of that hole before they can even get to where their parents and older peers are now. So it doesn't make sense to me that Gen Z thinks they're going to retire earlier than boomers. They're going to retire later if they want to eat."

"One of the real bright spots in the survey for us was how much Gen Z believes their situation warrants financial advice more than any other generation. And that is not something that we commonly have heard in the past," Stewart countered. "So knowing that this group of people is incredibly engaged in their finances and maybe at an earlier age than previous generations... Focusing on finances earlier can really help build strong habits with money and can really help people to achieve those earlier retirement goals."

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Charles Schwab’s three best tips for meeting those goals include contributing to your employer’s 401(k) plan up to the match, paying off high-interest rate debt from credit cards or nondeductibles and securing an emergency fund to cover three to six months of living expenses.

"Plus, thinking about some new tools for engagement and maybe even technology powered by A.I., it makes me very optimistic about the future," Stewart noted. "Retiring would be a very, very achievable goal because of that plan, because of starting [saving] early, because of the discipline."

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