The fintech industry especially when it comes to personal finance has as in the past few years transformed how people save for retirement. Due to this, there are new ways that have been developed in the financial market by new players such as the Fintech companies which have developed retirement accounts that are easier to access, cheaper and more user-friendly.
In this article the author intends to highlight some of the popular fintechs in the USA that provides for retirement accounts, what services they offer, and their additional attributes.
Betterment: personalized investment for retirement
Betterment is one of the most known fintech companies, which offers the robo-advisory support and that is why it is suitable for retirement planning. Individual Retirement Accounts (IRAs) are provided with a clear emphasis on the client-oriented investment solutions that correspond to one’s plans and risk/return preferences.
Betterment’s retirement accounts are based on the Modern Portfolio Theory and involves the usage of automated data processing to build portfolios. Customers have options for the type of accounts, namely Traditional IRA, Roth IRA, and SEP IRA.
This means that it offers constant tracking and adjustment to maintain the investments within the user’s objectives. This form of managing the investments enhances convenience for the people since the automating of management saves them time to have more time looking at other productive aspects of their lives.
Among the of the positives of Betterment is the use of goals when investing and which aims at maximizing on investment. Hence, the users can choose a certain amount of money they wish to save by a specific age and Betterment will develop a unique investment strategy towards the achievement of that particular goal.
This feature is underscored by the fact that the company operates some of the lowest fees that retirees prefer when looking for solutions to invest their money. Moreover, it worth to mention that, if the client does not want to consult automated recommendations, Betterment allows contacting with a real financial advisor.
Wealthfront: automated wealth management for retirement
Another dwarf fintech who has also gained immense traction is Wealthfront specializing in services related to retirement planning. A prominent robo-advisor, Wealthfront has retirement accounts with necessary features for the construction of retirement savings from scratch.
The retirement account offered by Wealthfront comprises Traditional IRA, Roth IRA, and SEP IRA; they use machine learning algorithms to investment that matches the risk tolerance and financial objectives of the users.
The platform employs use of tax-loss harvesting and direct indexing aimed at reducing taxes while at the same time, achieving high returns. Such sophisticated services, that are normally sold to affluent clients, have become achievable with the assistance of Wealthfront’s technological solutions.
One aspect that differentiates Wealthfront from the competition is Path, a tool that encompasses all the elements of a user’s finances. Path guides the users by allowing them to input all aspects of a user’s financial present and future, which can include income, current expenses, and savings targets.
In terms of saving for retirement, Path allows users to see precise projections and comprehend how these issues and decisions will affect his or her retirement. Similarly to Acorns, Wealthfront does not charge any commissions and has rather low management fees coupled with no minimum balances.
Together with generally low fees, which are further reduced through the assets accumulation, easy-to-use interface allows Wealthfront to be considered as a valuable investment tool for people who don’t intent to actively manage their retirement portfolios.
Personal Capital: comprehensive retirement planning with human advisors
An interesting and unique approach evident in Personal Capital is the strong combination of robo-advisory as well as financial advising. It is in the enhancement of retirement planning, it is most effective to lend the advantages of technology while still incorporating human advisors.
Personal Capital offers several retirement accounts namely: Traditional IRA, Roth IRA, and SEP IRA. One of the available services is the Wealth Management service that includes retirement planning in terms of investments, taxation, and bequeaths.
Residents could obtain a more integrated perspective of their financial status and even specific information on their retirement preparedness levels as well as planning guidelines to get to a desired status.
The strong suit of Personal Capital, without a doubt, is the level of detail provided in the platform’s financial chart. A feature of this tool is the consolidation of all of the user’s financial accounts in one place.
As for the retirement planning the gauge is endowed with the Retirement Planner tool that is aimed at presenting detailed calculations along with the “what-if” analysis. This enables the users to determine the effects of any change in certain parameters, for example, in income, or expenditure, on their retirement prospects.
Apart from the robo-advisory, Personal Capital has an advisory arm where one can hire a certified financial planner. These advisors give individual solutions or assistance to the users regarding intricate issues in finance.
Thus, by combining technological advancement with professionals, the users are provided with personalized advice that corresponds with their retirement plans. The principle of transparency and the company’s duty of care highlight another strength of Personal Capital.
Conclusion: choosing the right fintech for your retirement needs
The rise of fintech has dramatically improved the choices currently available in regard to retirement saving in the USA. Some of the new entrant firms included Betterment, Wealthfront, and Personal Capital that has brought changes that make retirement saving easier, cheaper and efficient.
Some of the things to watch out for including the investment approaches, costs, functions that allow engagement with actual flesh-and-blood advisors, and ease of use. Due to Betterment’s specific financial planning and individualized investment strategy based on each client’s goals, it is most suitable for those who require an affordable, automated service.
Some of the features that would be appealing to Wealthfront customers include; Our automized tax-loss harvesting strategies together with other services such as financial planning. Personal Capital combines the features of the traditional robo-advisor and access to human financial advisors thus offering the customers the all-in-one platform.
In conclusion, the particular fintech that you will opt for regarding your retirement planning will thus depend on the following considerations; This is because each of the fintech has its strengths that make it most suitable for a certain type of clientele.