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You’ve probably already noticed a host of “robo-advisor” platforms cropping up on the internet. They promise the ability to manage your investments long-term and make decisions for you at a fraction of the cost compared to traditional financial advisors. Unfortunately, these programs left an entire sector of the market untouched – those individuals and companies that use defined contribution plans like 401(k)s.
Enter Blooom, the new robo-advisor solution for these 401(k) and defined contribution plans.
Instead of managing your contributions on your own, you can hire Blooom to assist you with growing your retirement funds. Their team of professionals and their automated platform can help you to research, invest, manage, and rebalance your current 401(k) quickly and efficiently. Over time, you can watch how Blooom adjusts your funds and continues to monitor your account for constant growth.
How Does Blooom Work?
Blooom takes a relatively simple three-step approach to managing the funds contributed to your 401(k). Their unique and proven algorithm allows them to help you identify the perfect funds and investments based on your long-term savings goals and current contributions. Take a look at their process for yourself:
- Analyze the options. The program will take a closer look at what funds are available to you and which ones are right based on your retirement goals. Many times, they tend to favor index funds but actively managed funds are also an option, if necessary.
- Select investments. After gauging your current progress toward a target allocation, Blooom uses its algorithm to check and double-check the exact funds that should be included.
- Monitor and rebalance. The market is constantly changing, and so should your portfolio. Blooom constantly monitors your account for changes to the fund or your savings preferences in between regular rebalancing every ninety days.
Worried about the prospect of computers handling all of your finances on their own? Fear not because Blooom also has real people who test and confirm the rebalances on a regular basis. This ensures that there are some safeguards to the digital process in order to protect your investments and your potential long-term gains.
Most employees who have access to a 401(k) will be able to hire Blooom to help them manage it. As long as you have online access to the account, it should be no problem to link it up for a quick analysis of your portfolio.
While Blooom is truly ideal for hands-off investors who prefer not to think about their retirement investments, it does allow you to take some active role. If you would like to, you can alter your current portfolio to match your desired investment mix.
This makes sense if you prefer a riskier investment style but are close to retirement. The opposite may also be true: you could be decades away from your golden years but still prefer to play it safe. Blooom will offer you their suggestion, but it’s still your portfolio at the end of the day. Change the mix however you prefer.
Don’t forget to make good use of their fiduciary service as well. Do you have a question about retirement or an investment other than your 401(k)? Contact their financial advisors to seek advice about what comes next for you.
What Will It Cost You?
The idea of paying for financial advice quickly fills investors with trepidation. In the past, these professionals have charged large percentages, hidden fees, and consultation fees just to take a look at your current state of affairs. The good news is that robo-advisors like Blooom are changing the conversation when it comes to cost.
You can get started with them for nothing at all.
Allow Blooom to analyze your current account to show you the hidden fees, see your diversity, and receive recommendations on the proper mixture of stocks and bonds your portfolio should have. This free analysis gives you just a small taste of all that Blooom has to offer their clients.
For a measly $10 each month, you gain access to this analysis and so much more. They take the information gained from your 401(k) analysis and start to actually put it to work for you. Hidden costs are minimized, your portfolio will be adjusted regularly, and you receive professional assistance with your retirement funds.
This small monthly fee can pay huge dividends in the long-run, particularly if you haven’t been managing your retirement accounts well over the years.
Is Blooom Right for You?
While Blooom’s services are definitely something to consider, they do serve a rather narrow section of the investment market. This robo-advisor services employer-sponsored retirement accounts (401ks, 403bs, 401as, and 457s), so individuals who favor other retirement savings plans will need to find a completely different platform. Blooom fills a much-needed void in the robo-advisor market but definitely walls itself in when it comes to providing a niche service.
One of the best parts of Blooom is that there are no minimum account balances. While some services require a $5,000 initial balance that will continue to grow on a monthly basis, Blooom allows users who are just starting to save for retirement to jump on board.
Customer support is readily available for those who need it. Whether you prefer to pick up the phone and talk to a real person or to chat online, someone is available to support your account during regular business hours. An email during the off-hours promises a response within the following business day.
Ultimately, Blooom may be right for you if:
- You prefer a hands-off investment style.
- You want low-cost retirement savings account management services.
- Your primary retirement savings account is through employer-sponsored retirement contribution plans.
Don’t allow yourself to get to retirement with less money than you could have earned. This can have a serious impact on the lifestyle you’re able to maintain in your golden years. By taking advantage of the low-commitment and cost-efficient financial planning services from Blooom, you can create a much more balanced portfolio that could help you to reach your retirement savings goals with ease.