Skip to main content
Open menu

Betterment 401(k) Plan Demo

Betterment offers tools like guided onboarding, personalized planning, and goal forecasting to make saving for retirement more intuitive and approachable.

40k Demo Feature Image

Video transcript:

Today we're going to walk you through a demo to showcase the employee experience for new 401(k) plans at Betterment. At Betterment we pride ourselves in providing clear, transparent, and actionable advice for all with an easy-to-use interface. To help with account setup and personalization, all new employees will be prompted to complete Betterment's guided onboarding.

Guided onboarding is a series of four key suggestions to help employees optimize their plan and Betterment experience. First up in guided onboarding is reviewing and updating 401(k) deferral rate. Employees have the ability to contribute a percentage or dollar amount of every paycheck to a Traditional and/or Roth 401(k). Now we show this upfront so that those who already know how much they want to save are easily able to review and do so. However, most employees will likely have questions on how much they should be saving, which accounts are best for them, and whether they should be using a Traditional or Roth 401(k). Setting up a personalized retirement plan at Betterment can help to answer those questions.

When setting up a retirement plan at Betterment, we'll ask each employee to confirm just a few pieces of information about themselves and then enter two key inputs. First, desired retirement age. The second, desired annual spending in retirement. Betterment will help to estimate desired annual spending for each employee in their retirement using what we know about their income and cost-of-living data in their zip code. Based on retirement age, we'll recommend an appropriate risk level for the portfolio.

And we know that most 401(k) participants don't consider themselves as investors, which is why we default people into the Betterment portfolio strategy, which utilizes low-cost index ETFs using an allocation tied to expected retirement date. We also offer a feature called Auto Adjust, which will automatically lower risk for the employee's 401(k) portfolio as they move throughout their career and closer to retirement. And for those who want to be a little bit more hands-on with their investments, you certainly are able to do so, and are able to adjust risk level or potentially even use other portfolio strategies at Betterment.

Once the portfolio is confirmed and the goal is set, we'll be able to project how likely the employee is to meet their goal, which will display graphically and show employees whether they are on or off track. In fact they'll be able to see this status every time they come into their account from here on out.

Now for some employees their Betterment 401(k) may be their only retirement account. But we know that others may have retirement accounts outside of Betterment– maybe from an old employer, or maybe even an account their spouse contributes to. These external accounts can easily be synced to Betterment and included in the retirement goal projection and savings plan. The more information that we know about someone, the more personalized and targeted our advice can be.

Based on whatever information we have available to us, we'll not only tell someone how much they need to save every year, but which accounts they should use to optimize their plan. This takes into account current and future tax rates, ages of the employee and their spouse, matching contributions, fees, and available account types.

We neatly display a prioritized recommendation in our "how to save" plan, which will update each year. This is also where employees can see a personalized recommendation on whether they should be saving in a Traditional or Roth 401(k), which is one of the most common questions that we get. They can easily make updates to their Betterment 401(k) deferral rates right from the plan, and even add other accounts if need be based on the recommendation.

In addition, we offer a goal forecaster, which allows employees to run different what-if scenarios. They can adjust things like planned retirement age, desired spending, or even the amount that they plan to save every year and immediately see an updated on or off track status and a new savings plan to meet these goals.

Now once everything is complete with setting up the 401(k) portfolio, reviewing goals, the plan, and goal forecaster, guided onboarding will prompt every employee to complete administrative tasks such as adding beneficiaries and linking bank accounts. All of these things can be changed at any time and can be reviewed to make sure that your money goes where you want it to if something were to happen to you later on in life.

Once administrative tasks are completed, employees can even add goals for other financial objectives, such as building an emergency fund, saving for a down payment on a home, or even saving for college. Just like with retirement, we'll recommend a risk level for the investment based on the goal and time horizon, and then recommend a savings plan based on the target needed for the goal. Employees can then set up automatic deposits directly from their bank account to stay on track towards meeting these goals.

So that covers the platform demo! In summary, our goal is to streamline what is often an overwhelming process and to make your employee's experience with their Betterment 401(k) a delightful one. Thanks for watching.

401(k) plan administration services provided by Betterment for Business LLC. Investment advice to plans and plan participants provided by Betterment LLC, an SEC registered investment adviser. Brokerage services provided to clients of Betterment LLC by Betterment Securities, an SEC registered broker-dealer and member FINRA/SIPC. Betterment LLC and Betterment Securities are affiliates of Betterment for Business LLC.