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Questions You’re Asking Our Financial Advisors

Since the launch of Betterment’s messaging feature, which connects customers to our licensed financial professional, we’ve seen dozens of amazing questions come in.


By Garrett Oakley, CFP® CPA
Financial Planning Professional, Betterment  |  Published: August 2, 2017

Betterment customers have important questions that are particular to their specific personal situations.

If you haven’t yet started using Betterment’s messaging feature, get started—download the Betterment app and connect with a licensed expert today.

Last month, we were proud to introduce Betterment customers to a new feature in our mobile app: a messaging tool that lets you send your questions to a licensed financial expert anytime, anywhere.

Since the hour we launched the feature, we’ve seen dozens of great questions come in—some from long-time customers, others from new customers who have just transferred their investments to Betterment. They’ve also come from a wide variety of topic areas. And that’s what we wanted. We built the feature to let customers ask any question from any angle, whether they want help planning for a new goal, understanding their own risk tolerance, or deciding which tax features might be right for them.

If you haven’t yet sent our experts a question, you can try it out by downloading our mobile app from the App Store for iPhone or on Google Play.

To give you an idea of what questions our customers have been asking, here are six messages we’ve received so far. We have changed identifying information to protect our customers’ privacy and have lightly edited the questions for clarity. It’s important to remember that the following questions and answers are excerpts from the full message and may not apply to your particular circumstance.

“Is it better to make an IRA contribution all in one lump sum at the end of the year? Or should I do it monthly up to the maximum limit?”

Andrew WestlinAndrew answered: Good morning! My name is Andrew and I’m a licensed financial expert here at Betterment. If you have the ability to make a lump sum deposit, we recommend making your IRA contribution as early as possible. In a perfect world, that would be on Jan. 1. We want your money to be working as hard as possible for you, and the longer your money is invested, the better off you may be. Our mantra is that time in the market is more important than timing the market. Check out this article for more context.

“What changes should I make to my account to help it perform better? Should I do a Tax-Coordinated Portfolio™? I have an external 401(k) that I’ve linked into the account, so I’d love to get your thoughts.”

Andrew WestlinAndrew answered: A Tax-Coordinated Portfolio (TCP) is a strategy that we feel can provide additional after-tax returns. I took a look at your Betterment account and saw that you have both a traditional and Roth IRA. In this case, I would recommend turning on TCP. With TCP, we strategically locate assets across your retirement accounts to take advantage of how those accounts are taxed. The three account types that can be included are traditional IRAs, Roth IRAs, and taxable accounts. You will only want to include accounts that are intended to be used for retirement, and, in your case, that means your IRAs.

“Morning! I’ve got $30,000 for a down payment on a condo. Looking to make a move early next year. Where’s the best place to park the money ‘til then?”

I answered: My best advice is not to invest it at all. I would park it in a savings account or a certificate of deposit with the correct time horizon. Because you have an end date in sight and it is within a year, I wouldn’t expose the dollars to market volatility just to try and get a little extra return.

“How do I figure out what the principal for my Roth IRA is? I want to figure out how much I contributed this year, because I’m thinking I’d like to withdraw some funds without hitting the 10% penalty.”

I answered: The best way to know your basis (contributions) is to look at your Activity tab within your Betterment account, then filter by account and transaction type. If you have also made Roth IRA contributions somewhere other than Betterment, you would want to grab old statements or call the old broker.

“How should I allocate money going into my safety net account? I want it to grow, but I don’t want to lose all of it. It’d be great if my safety net would still be there if the markets crashed. :)”

Marshay ClarkeMarshay answered: Your Safety Net portfolio is actually quite aggressive at 95% stocks. I’d recommend that the allocation be closer to 40% stocks. This is for the exact reason you mentioned: The portfolio is meant to help get you higher returns than your savings account, but it’s still conservative in case of a downturn. Because a Safety Net account is typically for emergency funds, it’s important that the risk-level is appropriate.

“Should I even have a individual taxable account if I haven’t maxed my IRA yet?”

Andrew WestlinAndrew answered: Great question, and I believe it depends on what your goals are. If we are specifically talking about your retirement savings goals, we want to prioritize which accounts you save in to maximize your assets from a tax perspective. Therefore, you would want to max out any qualified retirement account before using a taxable account for retirement savings.

These examples are powerful demonstrations of just how helpful it can be to message a licensed financial professional with your personal financial questions. Download the Betterment app today to get connected.

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