Robo-advisors for retirement planning

Everyone has retirement worries and with worries come questions.  For many of us, the questions can get specific about strategies and or maximizing time and usage, but for most of us, we are asking a lot of the same questions that everyone else is asking.  This is where a Robo-advisor can help greatly, and Betterment is our choice of the lot. Let’s takes a look at how Betterment delivers what investors need and how you can take advantage.

Betterment serves a wide variety of users and clients, but it is best for Investors who do not want to have a lot of influence and control of day to day decisions, it also focuses on users looking to achieve retirement goals. Because of its low balance requirements it allows users who are not quite comfortable committing to use it without fear of losing too much time or getting funds stuck in something you are simply not comfortable with.

Betterment is built on the idea and principles of the modern portfolio theory, which is essentially the practice of diversification.  The basis of the company uses ETFs (exchange-traded funds) that comprise of nearly 12 asset classes for specific levels of risk that the user can choose from.  When using the platform users simply choose from three default settings, the first is the “smart beta” portfolio that is focused on high yield stocks that carry higher risk.  The second is the “income portfolio” and it is made up of only bonds, which are inherently safer but also pay out a far more predictable rate. The third and last option is the “socially responsible portfolio” which is an investment strategy that invests in companies that have specific types of focus like green energy and cleaning the environment.

One of the major benefits of Betterment is that it automatically rebalances users portfolios when cash moves in or out of the account, regardless if its in the form of dividends or regular account withdrawals and contributions.  Account rebalancing can also automatically be triggered by choice of tolerance over a certain percentage of a target set by the user. Betterment also allows for fractional share investing which helps people with lower balances still buy into high dollar share companies regardless of there buying power.

The bottom line is that Betterment is a great tool for anyone who is looking to get started for low account fees of only 0.25% annually while asking nothing else upfront.  It is simply a no brainer when it comes to retirement planning.