Step-by-Step how to use Blooom and how to check your 401K plan for fees
You could be committing the biggest mistakes in 401K investing right now. It has nothing to do with how much you’re investing and everything to do with the fees you’re paying and how your retirement is being managed.
In this video, I’m going to review a free service by Blooom that will help put you back on track to meet your 401K goals.
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How Bad is Retirement Investing in America?
We’ve been talking a lot about retirement investing lately. Over the last two videos, I revealed the five worst mistakes almost everyone makes with their 401K and answered your questions about how to get the most from your money.
The situation is bad. We know that. The average American starts retirement with just $167,000 in their 401K account, about enough to provide for $560 a month.
Is that enough to live on in retirement?
Worse is that it’s not necessarily that you’re not investing enough. Between the hidden fees and other mistakes, investors are losing hundreds of thousands in what should be their retirement nest egg.
That’s why I asked Blooom to help me put together this series, to reveal those 401K mistakes and show you how to get back on track for your financial future.
Blooom Review and 401K Questions
Now we had a few questions about Blooom in the previous videos so I wanted to use this one to review the website and how it’s helping to solve all those 401K problems we’ve been talking about.
Blooom was created because of one of those worst 401K misconceptions, that someone is managing your investment. You may invest through your employer’s plan and with a company but nobody is really making sure you stay on track.
So a couple of investment managers, Kevin Conard and Chris Costello, along with Randy AufDerHeide, created a program that would do this management people were missing.
In less than five minutes, Blooom will tell you how your investment fees compare to the average and how far off your investments are from the mix right for your goals. That’s all free. It’s a free service Blooom offers to help investors see those 401K mistakes and how to get back on track.
Then, if you want stress-free 401K investing, Blooom will manage your investments so you never have to worry about it again and it’s going to do it at a fraction of the cost you’d pay a financial advisor.
How to Use Blooom 401K Checkup
I’m going to walk you through how to get your free 401K checkup before talking more about what Blooom can do to help you reach your retirement goals.
[Watch the Video for a Step-by-Step to Getting Started on Blooom]
When you click through to that free 401K checkup on Blooom, first you’re going to enter some very basic information like your date of birth and when you want to retire. Then Blooom is going to ask five questions that will help it understand your tolerance for risk.
These questions are hugely important because they work with your other retirement goals to tell you that perfect mix of stocks and bonds that will fit your needs but won’t cause you to freak out when stocks crash.
And Blooom is going to show you that mix of stocks and bonds. From what you’ve told them, they’ll reveal how much you should have in each to reach your goals. Here because I answered most of the questions for average or high risk tolerance and I still have 25 years to retirement, Blooom is saying that I should have almost all my money in stocks but with a little in bonds for safety.
Understand though, you still have full control over your 401K, even if you decide to have Blooom help you manage your retirement investments, you can always change this mix of stocks and bonds.
Now comes the really cool part, Blooom can connect directly to your 401K to look for those hidden investment fees and other mistakes. You look for your 401K administrator or just enter it in the box here. Then you login with the username and password you use for your 401K account.
Blooom uses 256-bit encryption and bank-level security so your information is always safe.
Then you’ll see a complete analysis of the investment fees, risks and other mistakes in your current plan. Blooom is going to base this on those mistakes we looked at in the prior videos; things like relying on those expensive target date funds and not aligning your investments with your needs.
One of the most important pieces of the free checkup is this investment fee assessment. Blooom will show you exactly how much you’re paying in investment fees and estimate how much you could save over the years to retirement by managing your investments better.
Then Blooom is going to compare your current mix of investments with the optimal mix and estimate how much you could gain by switching to that better mix of stocks and bonds.
Even if you don’t use Blooom’s service to manage your 401K account, the free checkup is going to show you exactly where you’re investing by category and compare it to a recommended mix based on your goals. So you see here, not only is it helping me get a more appropriate mix of investments to reach my goals but by narrowing it down to fewer funds, I’m saving on those annual fees and expenses.
Finally, the summary here is going to put it all together. How much you could save in investment fees, an estimate for how much further your investments will go with the right mix and then how much it could be worth to you to have professional management on your account.
If you just take that $6,738 potentially saved on fees in the example over the 25 years to retirement, that’s worth $22.46 a month right there.
Adding these other savings and the fact that I know my 401K account is being professionally managed to stay on track to meet my goals.
Now that free 401K analysis is completely separate from the 401K management Blooom offers and I urge you to click through to find out which of those 401K investing mistakes you might be making.
If you do decide to have Blooom help manage your retirement investments, it takes less than a minute and you’ll never have to think about it again. Blooom charges one flat fee, no percentage commission that grows over time, it’s just $10 a month. That means if you have $100,000 in your 401K account, about the average for someone in their 40s, you’re paying just one-tenth of a percent for stress-free management of your 401K investments.
Blooom is going to constantly watch your account, it’s going to rebalance your investments and make sure you’re getting the lowest investment fees available in your employer sponsored plan and are on track to reach your retirement goals. There are also some extra features that alone are worth that $10 a month like the contribution analysis and the ability to ask questions directly to an advisor.
Blooom works with just about any company 401K plan and the free 401K review takes less than five minutes. Click through the link in the video description and take advantage of this offer because it could save you money and it will help put your retirement savings back on track.