Betterment Review 2020: RoboAdvisor, Financial Planning, And Banking


You know a couple weeks ago when I told you that I was finally going to open a retirement account? I said I was going to open an SEP IRA.Well, I lied. You see, I had every intention of opening an SEP IRA. So when I was ready to open my retirement account I started weighing options. Which brokerage should I go with?I started reading reviews. Then I would go to each website and check them out.And with my beginner investing abilities I wanted to go with something easy. With that said, I’m loving .For those of you who have yet to open a retirement account let me tell you why I’m in love with Betterment.com and why we think it’s a top choice for a robo-advisor to help you manage your investments. Check it out in our Betterment review.

When you create an accountwill ask you some basic questions about yourself in order to determine your risk tolerance.They use these questions as well as your age to determine this.After answering my set of questions they determined my risk allocation to be 90 percent stocks and 10 percent bonds.

After determining your risk allocation you can then set up your chosen an account (which takes about a minute) and create a goal.The accounts you can set up are:After setting up your account and linking up your bank info you simply choose a goal and Betterment will give you advice.

The next thing you’re probably wondering is how will your money be invested?Well it works like this: Based on your allocation,will automatically invest your money in a diverse group of Index Funds. (Read: What are index funds?)Here is an example:

You do no work at all here. You simply deposit your money and Betterment invests it for you. And you can adjust your allocation ratio at any time.If you feel the allocation they give you is either too risky or too boring simply adjust it to what you prefer!My favorite part about Betterment?There are no minimums to open an account and no required automatic deposits. This is perfect news for beginner investors with little money to put down!A “digital” plan, what I signed up for, costs a straightforward 0.25% fee of the account balance. If you deposit $10k into a Betterment account, the annual fee to Betterment (0.25% of $10k) is $25. Not bad. What you get in exchange for that fee (straight from ):Betterment also offers a “premium” plan, which costs 0.40% annually and requires a $100k minimum balance. Included in this price is what you would expect, much more hands-on and personal advice regarding your financial situation. For example, the premium service includes:Right now you can get up to 1 year of free management when you .

    Betterment has launched the Betterment Checking account, which is a free checking account that works seamlessly with Betterment’s other products – Cash Reserve and their robo-advisor. This account has a lot of great features:This account is promising, and will likely compete well with the best free checking accounts currently out there.

    Betterment Cash Reserve is Betterment’s savings account. The Cash Reserve account is a cash management savings account that has a top yielding account with no fees. In fact, this account is “outside” the management product, so you get the full APY on your money.Right now, you can earn  APY.See how it compares on our list of the best high yield savings accounts.

    Betterment has a ton of additional features that may be of interest to some – especially if you want to at least know what’s going on with your investments even if you maintain a hands-off approach.Some of the key ones include:This was one of the early features of Betterment that set it apart from other companies. If you have a taxable account, you can leverage tax loss harvesting to potentially boost your returns over the long run. What happens is when your investments lose value, Betterment can sell them to help offset the taxes that come with income and capital gains.This strategy is usually employed by sophisticated investors, but Betterment’s technology enables it for everyone.Betterment’s software is designed around goals – with one of the biggest being retirement. Their retirement tools are easy to understand and helpful for calculating both what you’ll have and what you’ll need.One thing we noticed is that their tools actually factor in an early retirement, unlike other tools on the market. This is great for those looking to FIRE. One of the great things about Betterment is that it’s set and forget – but one thing you typically have to set is at least a deposit into your Betterment account. Now, with their Betterment Everyday program, you can setup a minimum amount to keep in your checking account, and Betterment will sweep the rest into your Betterment account.Then, of you just want to keep cash on hand, Betterment has an Everyday account that could earn you more than 20x the average savings account. This is a great way to keep cash without worrying about having to open another account at another bank.Finally, Betterment is introducing a Two-Way Sweep – which combines the best of the above. Two-Way Sweep allows you to take your extra cash and invest it in your Smart Saver account. When you need it, they’ll move it back to your checking account. Read our full Betterment Smart Saver review here.If investing in companies that align with your values is important to you, Betterment also offers a Socially Responsible Investing (SRI) portfolio. It’s not a perfect fit for SRI investors, but it’s a good mix of SRI and performance.Betterment’s SRI portfolio aims to maintain the diversified, low-fee approach of Betterment’s portfolio while increasing exposure to companies that meet SRI criteria.The great thing here is that you can get SRI investing at the same pricing you’d normally pay Betterment. Contrast this with companies that offer SRI, like Swell Investing, and it’s a more economical approach for investors.Finally, for individuals interested in giving, Betterment has a charitable giving program where you can donate shares from your taxable accounts to a charity that Betterment has partnered with. Betterment will calculate and recommend donating shares that you’ve held longer than one year so that the gift can be deducted up to the maximum amount come tax time. This can be a great way to contribute to a charity and maximize your tax benefits.

    I love Betterment for the fact that it’s so easy. Every single part of the process is simple.You don’t get charged any transaction fees, you start investing with practically nothing, and your money is invested based on your risk profile.This is exactly what a beginner needs. Check out Betterment here.

    Written by Investors Wallets

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