Blooom Review – A Robo Advisor to Manage Your 401k Plans Easier

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If your company provides a 401k plan for its employees, are you getting the best returns possible on your 401k? The upside to 401k retirement planning is that you have some level of flexibility when it comes to deciding who will manage your investments until you’re ready to retire. Unfortunately, many experienced investment advisors are too expensive for everyday folks who just want to maximize their savings so they can retire by 65 or earlier.

For this reason, the founders of Blooom started their company to offer affordable 401k planning services to the 99% (according to their website). With Blooom, you don’t need to deal with a bunch of hidden fees, costly advising services, and other hassles that come with complex retirement planning. Instead, Blooom seeks to help employees learn more about 401k retirement planning for a minimal cost.

Blooom Review – A Robo 401k Advisor

If you’re ready to take the leap and increase your rates of return on your retirement account(s), then here are some things you’ll want to know about Blooom before getting started:

Why Blooom? 

Blooom is an SEC-registered investment advisory company that was founded with one goal in mind: making 401k retirement planning easier for people who want to reach their retirement goals without spending a lot of time or money getting the best returns possible. The company’s approach is simple: they use an algorithm to determine the best allocation for 401a, 401k, 403b, 457, and TSP retirement account investments.

Blooom does the work for you – picking the best stock/bond mix to help meet your retirement goals. They also find and minimize investment fees that could put a dent in your retirement savings.

And, Blooom rebalances your 401k plan when the time comes and it’s needed. Drift is a normal and expected part of a healthy portfolio. Blooom monitors the amount your retirement accounts drift from your target allocations, and they will automatically rebalance your account when drift exceeds their recommended limits.

You’re able to tailor your investments to a certain extent based on your retirement goals (such as current age, years left until retirement, etc.). They continuously track how your portfolio performs, makes adjustments as needed to improve your returns, and offer financial planners to answer any questions you might have along the way.

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Reputable media sites and financial resources such as Fast Company even named Blooom the “World’s Top 10 Most Innovative Companies of 2015 in Personal Finance” due to its unique service offerings for folks who perhaps can’t afford top-notch financial advisors for their retirement portfolios.

“Bloom was started about five years ago basically out of the realization that most people that aren’t worth millions of dollars have one of two options when it comes to managing their retirement savings,” says Chris Costello, founder of Blooom. “They can either become very self-proficient and DIY it. There is a segment of the population that has done that. Some are good at it, some are not good at it. It just depends on whether or not you have an interest in this stuff.”

“But I think most people would agree that generally speaking, the people that have an interest in or are good at managing their finances and investments, that’s probably a pretty small segment of the population,” says Costello. “You could probably also argue that it’s a pretty small segment of the population that’s genuinely wealthy. And, those wealthy folks usually have access to financial advisors that can do it for them. That’s where my background came from before Blooom. I spent about 18 years working with very wealthy individuals and I remember thinking the whole time I’m like, these people arguably need my help.”

Blooom Costs

Blooom’s cost model is pretty straightforward. Regardless of the size of your account, your monthly service charge is just $10. There are no hidden fees involved.

The $10 per month fee includes a variety of services, including access to financial advisors, professional monitoring services (to ensure optimal growth of your investments), periodic rebalancing (to make sure your mix of investments stays in-line with your long-term strategy and risk tolerance), and informative resources related to all things investing.

“In about three or four minutes, you can come to the Blooom site and you can get a totally free analysis on the state of your account, the health of your account,” says Costello. “Do you have the right diversification? Do you have enough? Do you have the right mix of stocks versus bonds?”

The right mix of stocks changes given your age and time horizon, your retirement, what are you paying in fees. These are three things that Blooom shows you for free and about three or four minutes if you come to the Blooom site and link your retirement account. And, Blooom gives folks the opportunity if they want to totally their choice. If they want to hire Blooom for a flat fee of $10 per month to take over, the site can actually manage the account for you.

401k Plan Analysis 

When you sign up for Blooom, they’ll perform a free analysis on your existing 401k account to highlight areas for improvement, uncover which types of investments are best suited for your retirement goals (More conservative? More aggressive?), pinpoint hidden fees that are currently dragging down your portfolio’s gains (and eliminating these fees to help you save money), and much more.

The #1 retirement killer is an apathetic attitude towards your investments – after all, you wouldn’t be able to retire without a significant nest egg, to begin with! So, Blooom makes it easier for anyone to manage their retirement accounts, even if you don’t have a lot of time to study the markets or a lot of money to pay a pricy human advisor to manage your funds.

Blooom Security Protection 

Cybersecurity is becoming more of a concern for the financial industry in wake of the Equifax hack, but luckily Blooom has plenty of security measures in place to help your accounts stay locked down and secured against hackers. The website uses SSL encryption to protect your information, as well as 24/7 hacker scans to remain vigilant.

The security in place is in case someone manages to get past the massive security barrier they have in place. Blooom also has 3^rd party verifications, secure servers, and bank-level security measures applied to your personal and financial information.

Is Blooom Right for You?

Blooom can help you avoid making mistakes with your 401k by actively seeking out areas where your investment performances can improve, eliminating wasteful fees, and charging a relatively low, $10 monthly premium for their services.

Best of all, Blooom offers extensive informational resources and access to investment advisors so you’ll have more control over your retirement account, minimize unnecessary costs associated with portfolio management, and help you meet your retirement goals in a timely manner.