My 2026 overarching theme is to get back to the basics. I figured, what is more basic than reallocating my 401k and updating future contributions? Instead of doing the heavy lifting myself, I opted to see what ChatGPT would pump out, and wow, it did not disappoint! I have done this from time to time, but I wanted to see what it’s “thoughts” would be.
So, I posed two questions to ChatGPT – 1) Should I rebalance” and 2) how should my future contributions be allocated?
My first prompt was as follows:
These are my 401k investment choices and my current balances. Can you build me a future contribution plan and analyze my current holdings to see if I need to rebalance? Only make changes if necessary. I want diversity along with a moderate aggressive approach (I am 44 years old). I’d like to keep fees very low so you may need to look up expenses
I received some good and bad information:
But the recommendations weren’t on point. Specifically, it told me to look for low cost funds and/or target funds, however, I don’t have that choice which led me to my second prompt:
I know my choices are high fee, but those are the ones I have so should I rebalance anything and given my choices what should my future contributions be made up of?
This is where it got very interesting.
Wow! It was able to assist me in what & why I should trim a certain position and then how to update my future contributions.
How I applied ChatGPT’s Recommendations for my 401(k)
The first thing I did was trim 10% from my growth fund and split it between the money market and international bond fund:
That should bring down the concentration on American Growth a little bit.
In addition, I am going to change future contribution. I didn’t love the allocation to international bonds as my hedge, so I split that recommendation in half with pure cash (money market):
The only problem I see is that this is something I should be rebalancing, or at least taking a look every quarter or 6mo. The reasoning is that if those asset classes increase, and I am pumping money into them, then it is possible they become overweight pretty quickly. I don’t follow international interest rates, so I have zero clue if this scenario is even plausible.
I hope that I have to redo everything when/if my 401(k) actually chooses funds that aren’t terribly overpriced.
Would I Recommend Using ChatGPT’s Analysis on a 401(k)
Yes, if, and it is a HUGE if, you understand why it is making the recommendations that it did. I told the system that I am moderately aggressive, and it shot back, “well then, why they hell are you in 98% equities?” If none of that makes sense to you – then DO NOT USE the tool for this purpose.
Think I am going to put the 401(k) on the back burner for 6months and see what happens. Two things that would change my mind
- We have one of those massive drop days – if that happens, I am raiding the cash
- I finally get some 401(k) options that do not suck.