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Best Robo-Advisor for Retirees

Disclosure: Please note that this article may contain affiliate links

You have just retired or are planning to retire soon.

Your focus now is on cash-flow, not so much on earnings. You just need to make sure you have enough to get you through the next 30 years without a paycheck coming in.

The good news is, if you invest with the right robo advisor, you don’t have to bother with any complicated investment decisions when you’re retired.

Best Robo Advisors for Retirees – My Top 3 Picks

Robo-advisors aren’t just for millennials – retirees benefit too. In fact, it’s almost more important for retirees to take advantage of this great investing service.

Which robo-advisor is right for you? Check out my favorites below.

Best
futureadvisor
Low Cost
wealthfront-best-for-low-fees
Account Minimum
$100,000
$5,000
$500
Management fee
The management fee for accounts between $1,000,0000-$3,000,000 is 0.89%. Once the account reaches $10,000,000 the fee will drop to 0.49%.
0.50%
0.25%
Portfolio
Customized for each client
14 different ETFs
ETFs from 11 different asset classes
Rebalancing
Tax Loss Harvesting
Smart Beta
Socially Responsible Investing
Human Advice
401(k) Assistance
Summary
Personal Capital has great financial management tools. The fees are on the higher end however this service is perfect for high net worth investing with access to human financial planners.
FutureAdvisor is the middle ground so to speak. The fees are slightly above average but they do offer a great service with free tools and human advice.
Wealthfront uses a low-cost, hands-off investing approach. The service is completely software-based so if you are looking for a dedicated human advisor it would be better to look elsewhere.
Best
Account Minimum
$100,000
Management fee
The management fee for accounts between $1,000,0000-$3,000,000 is 0.89%. Once the account reaches $10,000,000 the fee will drop to 0.49%.
Portfolio
Customized for each client
Rebalancing
Tax Loss Harvesting
Smart Beta
Socially Responsible Investing
Human Advice
401(k) Assistance
Summary
Personal Capital has great financial management tools. The fees are on the higher end however this service is perfect for high net worth investing with access to human financial planners.
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In-depth review
futureadvisor
Account Minimum
$5,000
Management fee
0.50%
Portfolio
14 different ETFs
Rebalancing
Tax Loss Harvesting
Smart Beta
Socially Responsible Investing
Human Advice
401(k) Assistance
Summary
FutureAdvisor is the middle ground so to speak. The fees are slightly above average but they do offer a great service with free tools and human advice.
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In-depth review
Low Cost
wealthfront-best-for-low-fees
Account Minimum
$500
Management fee
0.25%
Portfolio
ETFs from 11 different asset classes
Rebalancing
Tax Loss Harvesting
Smart Beta
Socially Responsible Investing
Human Advice
401(k) Assistance
Summary
Wealthfront uses a low-cost, hands-off investing approach. The service is completely software-based so if you are looking for a dedicated human advisor it would be better to look elsewhere.
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In-depth review

1. Personal Capital – Best overall

Personal Capital takes the cake for best robo-advisor for retirees. It offers the perfect combination of digital advisor and human advisor, not to mention its holistic approach to investing that is personalized, rather than generalized.

Features

  • Personal financial analysis – Personal Capital looks at more than your investments. They help you look at the big picture. Are you worried about overspending during retirement? Personal Capital will help you see where you overspend, what you can change, and of course, how you can structure your investments based on your risk tolerance.
  • Access to personal financial advisors – This is something that sets Personal Capital apart from all others. Everyone has access to a team of financial advisors for human advice. If you have more than $200,000 invested get two dedicated financial advisors.
  • You need a minimum of $100,000 invested – Retirees should have a lot more than $100,000, so this shouldn’t be hard to achieve
  • Access to many account types – You can open retirement accounts, non-retirement accounts, trusts, and even a cash account
PROs
You get a full view of ALL of your finances from your checking account to your retirement accounts and everything in between. Everything is located in one dashboard.
CONs
You must adhere to Personal Capital’s asset allocation. It’s not customizable, which may not work for investors that like to tweak their portfolios.
Personal Capital offers a You Index which is a personalized look at your holdings except for your cash, money market funds, and bonds. It’s a good indicator of how your investments are performing over time.
Some people may think the wealth management fees are excessive.
You pay one fee only so it’s easy to determine your costs rather than paying individual commissions and hidden fees.
You need at least $100,000 to use the wealth management services.
Tax Loss Harvesting
Your personal advisor may not be the same person each time ... unless you have at least $200,000 invested
Get up-to-date spending suggestions or investment changes whenever you make changes to your Social Security income or spending, or other changes.
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Low ETF expense ratios
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Great for investors that want a hybrid between human advisors and automated robo-advisors
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PROs
You get a full view of ALL of your finances from your checking account to your retirement accounts and everything in between. Everything is located in one dashboard.
Personal Capital offers a You Index which is a personalized look at your holdings except for your cash, money market funds, and bonds. It’s a good indicator of how your investments are performing over time.
You pay one fee only so it’s easy to determine your costs rather than paying individual commissions and hidden fees.
Tax Loss Harvesting
Get up-to-date spending suggestions or investment changes whenever you make changes to your Social Security income or spending, or other changes.
Low ETF expense ratios
Great for investors that want a hybrid between human advisors and automated robo-advisors
CONs
You must adhere to Personal Capital’s asset allocation. It’s not customizable, which may not work for investors that like to tweak their portfolios.
Some people may think the wealth management fees are excessive.
You need at least $100,000 to use the wealth management services.
Your personal advisor may not be the same person each time ... unless you have at least $200,000 invested
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2. FutureAdvisor

futureadvisorFutureAdvisor offers free retirement planning and account management, which is great for retirees trying to maximize their funds during retirement.

FutureAdvisor advises on TD Ameritrade and Fidelity accounts, so if you don’t have a brokerage account there, you must open one.

Features

  • ETF expense ratios from 0.14% to 0.18% – These low-cost ETFs help retirees make the most of their investments. You want to keep your portfolio conservative, but still growing and with low-cost ETFs, that’s possible.
  • Manages all accounts – FutureAdvisor oversees taxable and retirement accounts, helping you figure out the best way to maximize your income while you aren’t working and need to ensure you have enough funds for the rest of your life.
  • Tax-loss harvesting – It’s even more important to keep your tax liabilities low when you’re retired, as you need every penny you can keep during this time.
  • Human advisors – Get access to human advisors during regular business hours, which can be great to help maximize your savings and spending during retirement
PROs
Get a second opinion on your investments – Who doesn’t love a second opinion on their chosen investments? Consult with a personal advisor at FutureAdvisor to make sure you’re on the right track.
CONs
High fees - Be careful with management fees as they eat away at your earnings and right now, you need every penny you can get.
Free financial planning tools - You can get an analysis of your portfolio before you transfer it over if you are unsure of FutureAdvisors can help you make a difference
You must have a TD Ameritrade or Fidelity account - If you don’t have an account at one of the two brokers already, you must transfer your assets there if you want FutureAdvisors to manage them.
Automatic Rebalancing - If your portfolio gets knocked sideways, you’ll get an alert to rebalance it, giving you a chance to stop disaster before it occurs.
No socially responsible investing
Choose from 12 asset classes - Diversify your investments to minimize your risk during this crucial time in your life with the asset classes.
No fractional shares
PROs
Get a second opinion on your investments – Who doesn’t love a second opinion on their chosen investments? Consult with a personal advisor at FutureAdvisor to make sure you’re on the right track.
Free financial planning tools - You can get an analysis of your portfolio before you transfer it over if you are unsure of FutureAdvisors can help you make a difference
Automatic Rebalancing - If your portfolio gets knocked sideways, you’ll get an alert to rebalance it, giving you a chance to stop disaster before it occurs.
Choose from 12 asset classes - Diversify your investments to minimize your risk during this crucial time in your life with the asset classes.
CONs
High fees - Be careful with management fees as they eat away at your earnings and right now, you need every penny you can get.
You must have a TD Ameritrade or Fidelity account - If you don’t have an account at one of the two brokers already, you must transfer your assets there if you want FutureAdvisors to manage them.
No socially responsible investing
No fractional shares

3. Wealthfront

wealthfront-best-for-low-feesNew and experienced investors love Wealthfront’s many benefits and low management fee.

You only need $500 to get started and they charge just 0.25% of assets under management for this automated robo-advisor service.

Features

  • ETF management fees of just 0.08% – Keeping your fees to a minimum is important right now when you’re not earning money and rely on your investments.
  • Manage a variety of accounts – Whether you have taxable or retirement accounts, Wealthfront manages them all, helping you to maximize your income.
  • Daily tax-loss harvesting – Why pay more taxes than necessary, especially during retirement? Wealthfront automatically looks for tax-loss harvesting opportunities to save you money.
  • Automatic rebalancing – If your portfolio starts going the wrong direction, Wealthfront automatically rebalances it for you.
PROs
Low ETF expense ratios
CONs
Wealthfront’s advanced features are reserved for investors with at least $100,000
A large number of investment options
You can’t buy fractional shares
Low annual management fees
You can only get customer service via phone, no online chat
Free financial planning tools that even non-Wealthfront clients can use
You need at least $500 to get started
Earn interest on your cash account
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Regular tax-loss harvesting
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Automatic rebalancing
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Help setting financial goals
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Line of credit available for large investors
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PROs
Low ETF expense ratios
A large number of investment options
Low annual management fees
Free financial planning tools that even non-Wealthfront clients can use
Earn interest on your cash account
Regular tax-loss harvesting
Automatic rebalancing
Help setting financial goals
Line of credit available for large investors
CONs
Wealthfront’s advanced features are reserved for investors with at least $100,000
You can’t buy fractional shares
You can only get customer service via phone, no online chat
You need at least $500 to get started
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Alternatives

Vanguard

If you have $50,000 or more in an investment account, Vanguard is a great option. This hybrid robo-advisor offers the best of both worlds between human advice and automated investing.

A player in the industry already, Vanguard has quite a following, but its robo-advisor is somewhat new and suitable for many investors.

Features

  • Access to a team of financial advisors – Get help with Social Security optimization, best use of your retirement funds, or investment advice.
  • Customizable portfolio construction – This isn’t a one-size-fits-all approach. Vanguard customizes your portfolio based on the advisor’s thoughts and the information you provide.
  • Open any type of account – Vanguard offers taxable, retirement, and trust accounts.
  • Access to customer service reps – You can talk to a rep Monday – Friday from 8 AM to 8 PM.
PROs
Vanguard advisors don’t make a commission – All Vanguard advisors have a fiduciary obligation to do what’s in your best interest. They don’t make a commission off your investments, so you don’t have to worry about feeling pushed into specific investments.
CONs
You need at least $50,000 – This can be out of reach for beginning investors. Most robo-advisors have much lower investment requirements if any so this puts Vanguard in a league of its own.
Low costs – While 0.3% of assets under management sounds like a lot, if you compare it to a traditional full-service broker, you’ll see that you’re saving thousands of dollars. Of course, there are nuances that go along with it, but the savings is worth its weight in gold.
No tax loss harvesting – Large investors almost always want to take advantage of tax loss harvesting as it lowers your tax liability. Vanguard doesn’t offer this, but they do try to make your trades/settlements as tax efficient as they can without using the words tax loss harvesting.
You can track your progress 24/7 – Any time you want to know how your portfolio’s doing or how close you are to reaching your goal, you just have to log into your dashboard. You can talk to your advisors at any point too, so if you feel nervous or think your portfolio is too far off course, call your advisor.
Not the friendliest website – Typically, robo-advisor websites are chock full of tools and research, but not Vanguard. They rely mostly on your conversations with a financial advisor, rather than providing you with education, research, or even tools on their website. 
Vanguard funds are among the lowest costing investments – In addition to its low assets under management fees, Vanguard ETFs are among the lowest cost investments on the market. (That is also why other robo advisors invest in their ETFs as well)
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PROs
Vanguard advisors don’t make a commission – All Vanguard advisors have a fiduciary obligation to do what’s in your best interest. They don’t make a commission off your investments, so you don’t have to worry about feeling pushed into specific investments.
Low costs – While 0.3% of assets under management sounds like a lot, if you compare it to a traditional full-service broker, you’ll see that you’re saving thousands of dollars. Of course, there are nuances that go along with it, but the savings is worth its weight in gold.
You can track your progress 24/7 – Any time you want to know how your portfolio’s doing or how close you are to reaching your goal, you just have to log into your dashboard. You can talk to your advisors at any point too, so if you feel nervous or think your portfolio is too far off course, call your advisor.
Vanguard funds are among the lowest costing investments – In addition to its low assets under management fees, Vanguard ETFs are among the lowest cost investments on the market. (That is also why other robo advisors invest in their ETFs as well)
CONs
You need at least $50,000 – This can be out of reach for beginning investors. Most robo-advisors have much lower investment requirements if any so this puts Vanguard in a league of its own.
No tax loss harvesting – Large investors almost always want to take advantage of tax loss harvesting as it lowers your tax liability. Vanguard doesn’t offer this, but they do try to make your trades/settlements as tax efficient as they can without using the words tax loss harvesting.
Not the friendliest website – Typically, robo-advisor websites are chock full of tools and research, but not Vanguard. They rely mostly on your conversations with a financial advisor, rather than providing you with education, research, or even tools on their website. 
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Acorns

It started as the ‘spare change’ investor, but today, Acorns offers many features. It’s a robo-advisor/automated saving tool that retirees can use to their advantage.

Whether you’re still working on your nest egg or you have a nice nest egg built and just want a simple tool to keep it strong, Acorns is a great tool.

Features

  • Round up your purchases – It’s never too late to round up your purchases to keep investing. During retirement, you still need to grow your earnings, so why not automate it?
  • Low ETF expense ratios – It costs just 0.03% – 0.18% for ETF expense ratios, which saves you money on expenses.
  • 7 ETFs to choose from – While it’s not a lot, it keeps things simple and Acorns offers five portfolio options
  • Taxable and retirement accounts – You can open a taxable account and an IRA or Roth IRA
PROs
Everything’s automatic – If you don’t like thinking about depositing funds or making investments, let Acorns do it all for you from the savings to the investments.
CONs
Transfer fees – It costs $50 per ETF to have them transferred to another broker.
Connect as many cards as you wish – Acorns sweeps the spare change from every purchase on your cards into your investment account and then invests the money once you accumulate enough.
High monthly fees – You pay a monthly fee of $1 - $3 for Acorns. If you have $5,000 invested, that’s a 0.24% fee and you don’t get as many benefits as you would at say Wealthfront.
Small balance requirements – You only need $5 to start investing. While you obviously want more, it’s easy to get started and stay motivated.
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Great for new investors – If you’re trying out something new, Acorns is a great place to try it. They offer plenty of educational opportunities and guidance. 
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PROs
Everything’s automatic – If you don’t like thinking about depositing funds or making investments, let Acorns do it all for you from the savings to the investments.
Connect as many cards as you wish – Acorns sweeps the spare change from every purchase on your cards into your investment account and then invests the money once you accumulate enough.
Small balance requirements – You only need $5 to start investing. While you obviously want more, it’s easy to get started and stay motivated.
Great for new investors – If you’re trying out something new, Acorns is a great place to try it. They offer plenty of educational opportunities and guidance. 
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CONs
Transfer fees – It costs $50 per ETF to have them transferred to another broker.
High monthly fees – You pay a monthly fee of $1 - $3 for Acorns. If you have $5,000 invested, that’s a 0.24% fee and you don’t get as many benefits as you would at say Wealthfront.
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Betterment

logo of bettermentBetterment offers two services, Betterment Digital and Betterment Premium. The Digital program is for those with less than $100,000 invested, and the premium is for investors with more than $100,000 invested.

The fee is higher on the premium account, but you get more benefits.

Features

  • Low ETF expense ratios – Betterment offers ETF expense ratios from 0.07% – 0.17%.
  • 12 asset classes – Choose from a large number of asset classes to help diversify your risk and reach your goals.
  • Offers many options – From socially responsible investing to smart beta investing, Betterment offers all of it, giving you options.
  • Open any type of account – Retirement accounts, taxable accounts, trusts, and cash accounts are all acceptable.
PROs
Perfect for easy, hands-off investing – Once you have set your goals you can lean back and let Betterment do the rest.
CONs
Difficult to cancel the account – Betterment makes it paperwork heavy to leave them.
Rebalancing and Daily tax-loss harvesting – Minimize your tax liabilities with daily tax-loss harvesting, selling off your losses to offset your gains
Encourages you to invest your emergency fund – Most financial experts recommend keeping your emergency fund liquid, but Betterment recommends a specific portfolio that is on the aggressive side and could put your emergency fund at risk.
Offers a variety of tools – Betterment helps you plan your financial future by making smart financial decisions with your investments and regular accounts too.
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No minimum deposit – You don’t need any money to open an account, but even better is the low $100,000 minimum for Betterment Premium which offers access to professional financial advisors.
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Low management fees – Betterment charges just 0.25% for less than $100,000 and 0.40% for over $100,000
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PROs
Perfect for easy, hands-off investing – Once you have set your goals you can lean back and let Betterment do the rest.
Rebalancing and Daily tax-loss harvesting – Minimize your tax liabilities with daily tax-loss harvesting, selling off your losses to offset your gains
Offers a variety of tools – Betterment helps you plan your financial future by making smart financial decisions with your investments and regular accounts too.
No minimum deposit – You don’t need any money to open an account, but even better is the low $100,000 minimum for Betterment Premium which offers access to professional financial advisors.
Low management fees – Betterment charges just 0.25% for less than $100,000 and 0.40% for over $100,000
CONs
Difficult to cancel the account – Betterment makes it paperwork heavy to leave them.
Encourages you to invest your emergency fund – Most financial experts recommend keeping your emergency fund liquid, but Betterment recommends a specific portfolio that is on the aggressive side and could put your emergency fund at risk.
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United Income

United Income was created with retirees in mind. Their methods and decisions are all very retiree-focused.

They look not only at investments but at financial planning too, as that’s an important aspect for retirees.

Features

  • Account sequencing – Prioritizes which accounts you should spend from while maintaining your investments in others to keep your earnings growing during this crucial time
  • Personalized budgeting recommendations – During this ‘new’ time in  your life, you have to revamp your budget and United Income helps you do it
  • Plan your legacy – If you plan to leave behind a legacy, United Income helps you plan accordingly
  • Social Security advice – Learn how to maximize your benefit and make the most of the funds with the Social Security income advice that comes with every account.
PROs
Uses a smart beta approach – United Income tries to beat the market, not match it, for greater growth and earnings.
CONs
The sign-up process is complicated – You must call United Income to sign up, you can’t sign up online.
Diversification across 10 asset classes – United Income focuses on diversifying funds to keep your risk low and your earnings high
High fees – The management fee is 0.50% of assets under management, which is higher than most.
Offers tax-loss harvesting – All accounts are eligible, not just those with high balances.
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Offers a holistic approach to finances – United Income looks at more than your investments; they help you figure out the big financial picture during retirement.
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PROs
Uses a smart beta approach – United Income tries to beat the market, not match it, for greater growth and earnings.
Diversification across 10 asset classes – United Income focuses on diversifying funds to keep your risk low and your earnings high
Offers tax-loss harvesting – All accounts are eligible, not just those with high balances.
Offers a holistic approach to finances – United Income looks at more than your investments; they help you figure out the big financial picture during retirement.
CONs
The sign-up process is complicated – You must call United Income to sign up, you can’t sign up online.
High fees – The management fee is 0.50% of assets under management, which is higher than most.
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[Bonus] SigFig

Best if you don’t want to move your funds to a different platform

If you don’t want to move your investments, but want the advice of a robo-advisor, check out SigFig. It works only with third-party brokerage platforms, namely Charles Schwab and Fidelity. The idea is to maximize your portfolio while leaving it where it is to avoid unnecessary fees.

You can choose the free Portfolio Tracker that tracks all of your investments in one place or the Asset Management Plan that balances and diversifies your investments, to increase your earnings. This service is free up to $10,000 invested and then 0.25% per year beyond $10,000 in investments.

SigFig gives advice on how to maximize your portfolio for the greatest results during retirement.

Do you really need a robo advisor for your retirement?

If you want advice to maximize your earnings and decrease your costs, don’t give up on robo-advisors just because you’re retired. Sure, they seem like they’re made just for millennials with the new technology and all the bells and whistles, but there are plenty of benefits for retirees too.

Honestly, where else can you get professional-grade investment advice for a fraction of what human advisors cost? Why spend an arm and a leg on a human advisor when you could manage the investments yourself with the help of a robo-advisor?

Thanks to the low overhead and automated processes, you can pay minimal fees, and yet have professional advice on how to reach your retirement goals. It’s no secret that life really changes once you retire and I’m talking financially. Rather than getting slapped in the face with the new money issues, have a robo-advisor on your side, helping you make the most of this time you’ve worked so hard to have feel financially free.

How Robo Advisors Manage a Retiree’s Portfolio

As you hit retirement, your portfolios need to change. No longer are you relying on the aggressiveness of a stock portfolio. It’s no longer about growth, but about keeping what you earned. If you stay in a heavy stock portfolio, you risk a lot – you could even risk it all. Does that make sense?

Robo-advisors change your portfolio to a more conservative, bond-heavy portfolio.

Just please make sure your risk tolerance reflects the fact that you’re retired, and the robo-advisor does the rest for you.

The difference in portfolios retirees vs non-retirees

As I said above, it’s about being conservative when you’re a retiree and robo-advisors understand that. You’ll move from a stock portfolio to a mostly bond portfolio. Don’t worry, you’ll still have earnings, they just won’t be as large. But the better news is that you won’t have losses. When you focus mostly on bonds, you get an almost guaranteed return.

Because your focus is on cash flow and not growth, you’ll focus on not losing money in your portfolio. Hopefully, by this point, you’ve accumulated enough earnings that you can live off of it and the minimal growth it will make in a more conservative portfolio.

Pros and Cons of a robo-advisor for retirees

Pros

  • You get a hands-off approach to investing
  • The portfolio automatically adjusts for you based on  your new risk tolerance
  • You take advantage of tax-loss harvesting techniques
  • The fees are low compared to a human advisor
  • You don’t need a specific balance for most robo-advisors
  • You get tailored advice, sometimes even from a human advisor

Cons

  • You can’t get involved in the investments if you want to (some people prefer to)
  • You pay a percentage of your assets under management
  • You go from an aggressive portfolio to a conservative portfolio whether you want to or not

FAQ

Are robo-advisors good for retirees?

Robo-advisors are experts at assessing risk and telling how much you can risk, spend, and need to earn to reach your goals. While it seems like more of a feature for those approaching retirement, it’s also great for retirees.

How should you choose a robo-advisor?

Choose the robo-advisor that offers the services you need and the prices you can afford. Don’t focus on price alone, but also on the features. Does the robo-advisor offer tax-loss harvesting? What about automatic rebalancing or access to a human advisor? Make sure the robo-advisor has everything you need.

Can you lose money with a robo-advisor?

Yes, you can lose money with a robo-advisor, just like you can with any investment. While they diversify your investments, there’s nothing saying that you won’t lose some money at some point. Make sure you choose the right portfolio and choose a robo-advisor that automatically rebalances your account.

Do robo-advisors beat the market?

No, robo-advisors generally try to mimic the market but not beat it. Unless you invest in a robo-advisor that uses smart beta techniques, but those advisors typically have high minimum balance requirements.

What are the top advantages of using a robo-advisor?

Robo-advisors offer a variety of benefits including:

  • Low costs (usually a percentage of assets under management)
  • Offers tax-efficient investments
  • Automatically rebalances your portfolios
  • Ensures your portfolio coincides with your goals and risk tolerance

Which Robo Advisor is Best for Retirees?

So which robo-advisor is best for retirees like yourself? I suggest Personal Capital. It offers the best of both worlds, giving you room for DIY investing with automated investing. You get the bonus of personal finance advice, ensuring that you stay within your guidelines while maximizing your retirement income.

Summary

I like Personal Capital, the platform is truly the best allrounder. Especially if you are a little bit more involved with investing. However if you are the hands-off type investor there are a ton of other choices out there.

Please don’t hesitate to ask any questions and feel free to share your experience with any of the services I wrote about.

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