Is Empower 401k Right for You? Honest Review and Analysis
7 min read.
Stepping into the world of retirement planning can often feel like navigating a labyrinth. Enters Empower, a financial management platform streamlining this process and guiding you toward achieving your retirement goals.
But does it live up to these claims? Let’s dive into some Empower 401k reviews and find out.
The Empower Retirement website offers comprehensive planning tools with competitive returns, but fees may be higher than other plans.
User experience is easy to navigate and includes free financial tools and various investment options.
Customer service feedback is mixed. Best suited for high net worth investors looking for a comprehensive platform.
I am an affiliate of Empower Retirement. If you click on a link and join, I may receive a referral commission, at no extra cost to you. All opinions remain my own and each brand featured is individually selected.
Empower 401k Exposed
Empower (formerly Personal Capital), owned by Great-West Lifeco, combines the features of a robo-advisor and a budgeting app. This platform offers management services for employer-sponsored retirement plans and access to specialized financial advisors. Investors with deposits between $100,000 and $250,000 can gain access to a team of financial advisors.
However, these perks come at a price. The minimum requirements and fees for an Empower account are relatively high, but it comes with the following:
- Unlimited advice and retirement planning help from financial advisors
- A professionally managed ETF portfolio with reviews upon request
- State-of-the-art digital tools
Despite this, the site has its merits. It provides users with a suite of useful tools and resources for investment accounts and access to specialized financial advisors.
Furthermore, the website offers a comprehensive experience through its Tips and Tricks section, which includes cost-saving technology and financial management advice.
The question remains if these features and services are sufficient to balance the higher costs. We’ll investigate further to determine this.
Navigating Empower's Enrollment Process
Enrollment in their 401k is accessed through the participant website. The process involves:
Providing necessary personal and financial information, including setting up direct deposit
Selecting specific investments
Reviewing and confirming enrollment details
Submitting your enrollment
While the site guides users through this process, the exact duration may vary, and some users have reported negative experiences with customer service representatives.
Hence, it’s advisable to approach the enrollment process with patience and meticulousness.
The User Experience Unraveled
The user experience on the Empower Retirement website is intuitive and straightforward for accessing high-level information. However, digging into account details can prove to be a challenge.
The website needs to provide explicit answers regarding the fees and gross expense ratio of the current portfolio, and finding details such as the past performance of individual investments and an overall view of the charges can be tough.
Empower offers a wide range of robust tools for investment accounts that are completely free. These include an investment checkup, a 401(k) fee analyzer, and a spending tracker.
But how do these tools fare in practice? And what about the platform’s options? We’ll examine these aspects now.
The homepage gives you a quick snapshot of all related financial accounts. It displays the total value and year-to-date performance. However, it lacks a research tab with articles related to earnings calls or recent news.
Missing market or company-specific news on the homepage is a significant drawback and could be a contributing factor to the poor customer service experiences some users reported.
Compared to other brokerages, Empower’s homepage is not as information-rich and has a more simplistic display. This implies that while the interface might be easy to navigate, it may fall short for users seeking detailed information.
Investment Instruments & Free Financial Management Tools
Empower offers a variety of investing options, including private equity investment options and:
Stable value fund
However, comparing multiple investments with Empower can be a complex process as information about each available fund needs to be accessed separately in the form of a PDF. This is a common issue faced by multiple other retirement participants as well.
Empower uses a personalized investment approach called Smart Weighting, in which investments are distributed equally across all sectors, rather than mirroring an index like the S&P 500.
It also offers rebalancing options for mutual or index funds on a quarterly, semi-annual, or annual basis. While these features provide flexibility, they also demand a level of investment acumen from the user.
Durability of Decision Support Tools
Their decision support tools, such as the retirement planner and “You Index” feature, facilitate financial planning and wealth management. The “You Index” combines your assets and evaluates their performance against major indexes, such as the S&P 500 or a blended account. It utilizes real-time data from the user’s retirement account, incorporating daily financial activity.
However, it does not provide answers to inquiries such as “If I increase my contribution, how much sooner can I retire? I am wondering what effect reducing my contributions will have on my development? Will it affect it negatively or positively?”, which may be relevant for mutual fund investments.
This suggests that while the tools are sturdy, they might not offer exhaustive insights for all kinds of financial queries.
Real-World Returns and Responsiveness
Having discussed the features and services of Empower 401(k), it’s time to consider its real-world performance. Here are some key points to note:
The average rate of return for Empower 401k accounts is approximately 8% annually.
Empower’s account management has been praised for its financial planning offer, free budgeting and portfolio management tools, and access to live financial analysis.
However, users have reported unsatisfactory experiences with its customer service, including difficulties with the app and inadequate support.
It’s worth noting that the feedback on its customer team is varied, with some users reporting poor experiences while others praise the platform’s support. In the subsequent subsections, we’ll dig deeper into their account management, customer service, and fee structure.
Account Management in Action
Empower’s account management features offer:
A comprehensive robo-advisor platform
Free financial tools
Investment management with robo-advisor algorithms and human financial advisors
Features to help manage investments, track portfolio performance, understand cash flow, and a personal financial software that syncs up all accounts in one location
This aids users in tracking the performance of their accounts and keeping them aligned with their financial goals.
The account comes with a range of financial planning services, including estate and tax planning, with the guidance of a financial advisor for those with an account balance of $1 million or more.
However, withdrawals typically take up to 10 business days, which might be a drawback for users needing quick access to their own money. Analyze Your Portfolio Online.
Customer Service Calibration
Customers may contact Empower via phone or email with inquiries or concerns regarding their account. Representatives can elucidate policies outlined in the plan and assist with rollovers. However, they are not able to offer any financial or legal advice. This could restrict the extent of support users can receive.
Empower offers a customer helpline Monday through Friday - from 9:00 a.m. to 5:00 p.m. You can contact them either through the app or over the phone.
After hours, customers can submit inquiries through the Dashboard or support portal. However, the efficacy of this support is debatable given the mixed feedback on customer service.
Fee Structure and Value Assessment
Investors working with Empower are presented with an attractive fee structure. They will pay 0.89% of their assets managed on the first $1 million. It supports non-retirement accounts, such as Roth, traditional, rollover, and SEP IRAs, trust accounts, and cash accounts (not charged management fees). However, compared to other platforms like Wealthfront, Empower’s fees are significantly higher.
The account minimum is $100,000. An Empower spokesperson said that the expense ratio for Investment Services is typically around 0.10%. Those in higher tiers pay a lower fee of about 0.07%. This implies that the platform is better suited for high-net-worth investors.
Empower 401k Conclusion
Empower 401(k) has its strengths and weaknesses. Its favorable reviews and ratings, a selection of free and comprehensive tools for retirement planning, and access to live support make it an attractive platform. However, its drawbacks, including substandard 401(k) matching relative to other employers and high fees, must be considered.
In comparison to other plans, Empower 401(k) has similar features and benefits, but it’s key to compare its particulars against other retirement plans to ascertain which one is most suitable for your requirements.
Hence, while Empower 401(k) offers a comprehensive platform to manage your investment portfolio, it might not be the ideal choice for everyone. Sign up now to manage your money.
Empower 401k Reviews Summary
In conclusion, Empower 401(k) - ex Personal Capital - provides a comprehensive platform for IRA accounts and other investment assets with a variety of tools and services.
However, it comes with higher fees and has received mixed reviews regarding its customer service. Therefore, it is imperative for potential users to thoroughly evaluate the platform and compare it with other companies before making a decision.
After all, planning for retirement is a significant endeavor, and choosing the right platform can greatly impact your financial future.
Frequently Asked Questions
Is Empower a legit company?
Empower is a legitimate company based in San Francisco. They offer a fee-free cash account and financial analysis tools, with over $500 million in cash advances and 4.8 out of 5 stars in the Apple App Store. Highly rated by customers, they are an ideal choice for those looking to analyze their spending habits and track their net worth and retirement savings.
Are Empower retirement fees high?
Empower Retirement fees are quite reasonable, averaging at 0.86% of plan assets.
Which is better Fidelity or Empower Retirement?
Based on free trades, range of services, and minimal deposit requirements, Fidelity offers better value than Empower Retirement. Fidelity has an advantage with $0 per stock trade and no minimum deposit. Furthermore, Fidelity funds have no transaction fees, compared to $49.95 for non-Fidelity funds at Empower Retirement.
What services does Empower Retirement provide?
Empower Retirement provides retirement plan management services and access to financial advisors to help their clients plan for their future.
What customer support options are available through Empower?
Empower offers customer support options through their app and phone Monday to Friday, 9am to 5pm Pacific time, as well as after-hours inquiry submission through their Dashboard or support portal.
No Investment Advice. This article does not provide financial advice and has been prepared without taking into account any person’s objectives, situation, or particular needs.