In recent years, the rise of robo-advisors has made investing accessible to more people.
Having one can help you open taxable investment accounts and IRAs without too much trouble. And just about anyone with $25 and the will to invest can take advantage of today’s technology.
One area that has been neglected, though, is 401k management. Many of us sign up for a company’s plan (if we get one) and then promptly forget about it. We don’t pay attention to the investments available, or the fees potentially attached to them.
And, we certainly don’t adjust our portfolio once it’s been set.
Blooom aims to change all of that. This robo-advisor makes it a point to focus on 401k and 403b management.
So if you aren’t sure what to do with your employer-sponsored retirement plan, this tool might be just the thing for you.
First off, Blooom focuses exclusively on managing the assets in your 401k or 403b.
So when you first sign up with them, you can receive a free analysis of your account. No matter the size of it.
Blooom will also take a look at your retirement account and make suggestions for saving money on costs, based on the funds offered in your company’s plan. Additionally, you can receive recommendations for adjusting your asset allocation.
If you decide to stick with Blooom to manage your retirement account, your monthly fee is based on the assets you have under management.
Essentially, Blooom uses its algorithms to move your investments around to help you earn more for retirement while reducing your fees. Blooom also rebalances your retirement portfolio every 90 days.
A few pros and cons with Blooom
It’s important to note that Blooom only deals with 401k and 403b accounts. You can’t open IRAs or taxable investment accounts.
On top of that, you are limited to the investments available in your company’s plan. If your employer has poor offerings, there’s not much Blooom can do beyond limit the damage.
The good news is Blooom offers progress reports on your portfolio to help you see whether or not you’re building a healthy retirement nest egg.
Then, you can determine whether you need to contribute more each month. You’ll also receive suggestions about where that money should go.
Another perk offered by Blooom is a “translation” service. If you have confusing plan correspondence, email it to Blooom.
The experts at Blooom will review it and then tell you what it means in plain English. This is a nice bonus if you aren’t sure what different terms mean. Or, if it’s difficult to read the details of your plan.
Using the Blooom online platform
Blooom’s platform is very easy to use. All you need to do is answer a couple basic questions, provide your email, and create a password. Once that’s done, you can choose where your 401k is held.
After that, simply enter your username and password to connect your retirement account to Blooom.
Luckily, your employer doesn’t need to be a Blooom partner for this to work. And if you don’t see your 401k plan provider listed, you can search for it and still enter your username and password.
Once Blooom has access to your plan, it can analyze your holdings and figure out where you are paying too much. Plus, you’ll find out if your asset allocation matches your retirement target date.
One of the advantages of Blooom is that it can work with any plan, as long as you can access it online. What’s more, if you don’t have access to your company’s plan online, you can talk to your administrator to help you set up that access.
Keep in mind that you won’t be able to use Blooom unless you know your online username and password to access your company’s retirement plan.
How Blooom looks at your overall portfolio
Blooom will look at the fees and expense ratios associated with the funds you are investing in. If there are options with lower fees, Blooom will help you move your money into more cost-efficient funds.
One warning to note: Blooom doesn’t use your risk profile or future goals, other than your desired retirement date, to create an asset allocation. For the most part, Blooom will put your funds mainly into stocks until you get closer to retirement.
However, you can change your mix if you want. But if you let Blooom decide, it’s very stock-heavy to start. This isn’t a bad thing if you have the risk tolerance for it.
It should be noted that Blooom uses Modern Portfolio Theory to determine your mix. That means you will have more stocks when you are younger and your allocation will shift to favor bond funds as retirement approaches.
Once you get your account set up, and your retirement plan connects, the dashboard is intuitive and easy to use.
Blooom also uses an image of a flower to illustrate the health of your portfolio. It’s a fun visual that allows you to quickly and easily see where you stand.
You can use Blooom to change your asset allocation, review your fees, and get a top-level view of your retirement portfolio.
Blooom interest rates and fees
Blooom offers a very straightforward fee of $10 per month, no matter the account size. There is no account minimum and no account fees for transfers or closing.
However, Blooom is offering the first month free to Student Loan Hero readers!
Just keep in mind you’ll also have to pay the internal fund fees that come with your retirement funds.
Additionally, most retirement plans offer a mix of index funds and actively managed funds. These all come with expense ratios.
Blooom will help you find the least expensive funds for your needs. But, sometimes there’s no avoiding the costs.
Blooom’s management fee is on top of the fees that already come with your plan. It can be worth it if Blooom can help you find better ways to grow your wealth and reduce your costs in other ways, though.
However, overall the fees charged by Blooom can be a little steep, depending on your account balance.
If you are just starting out, and have a relatively small balance, that $10 a month is fairly hefty. And with a $2,000 balance, that’d be like having a management fee of about 6% per year.
When you consider that many retirement plan administrators charge between one and two percent annually, that seems a little more expensive than it should.
A higher balance with the flat fee structure can allow you to come out ahead in the long-run. But to start, you’ll be disappointed with the management fee charged by Blooom.
Blooom eligibility requirements
In order to use Blooom, you need to have an employer-sponsored plan. The types of plans eligible include:
In order to use Blooom, you need to have a retirement plan already that meets the requirements set forth by your company and by U.S. law.
As long as you have an employer-sponsored retirement plan, you can use Blooom to analyze and manage it.
Blooom customer service
It’s possible to contact Blooom’s customer service through email and live chat. In general, the company appears reasonably responsive.
Blooom also uses humans to review your portfolio and asset allocation. After the algorithm has provided you with an asset allocation, it’s reviewed by an actual person.
One of the bonuses of Blooom is that it is a Registered Investment Advisor. This means the company uses a fiduciary standard, and their financial suggestions have to be in your best interest.
However, because Blooom is limited to the funds offered by your employer’s plan, there is only so much that can be done. Their financial advice is limited to what’s available to you.
More about Blooom
Blooom is headquartered in Leawood, Kansas. It is one of the fastest-growing robo-advisors in history, reaching $300 million assets under management in about 20 months.
The company was created to fill the gap in account management for employer-sponsored plans. As of this writing, Blooom has about $464 million in assets under management.
Blooom is best for those who aren’t sure what to do with their retirement assets. It works well for consumers who are hands-off with their investing and hope to get a little more from their retirement accounts.
Blooom contact info
Blooom has two office addresses listed online.
5325 W 115th Place
Leawood, KS 66211
Kansas City Office
1712 Main Street
Kansas City, MO 64108
They can also be reached by phone at 888-446-8416, or through their online contact form.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 6.30%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.69% – 7.21%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|