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Retirement Planning

RetireGuide: Now with Synced Accounts and Social Security Upgrades

RetireGuide is Betterment’s retirement planning tool that gives you personalized advice. Now, we’ve made it even better.

Alex Benke, CFP®

By Alex Benke, CFP®
VP of Advice and Investing, Betterment
Published: November 16, 2015 | Updated: May 10, 2018

Unlike other tools, we base our advice on your retirement savings across all accounts, where you plan to live in retirement, your current income, and the types of accounts available to you.

Customers can now sync their external retirement accounts to their RetireGuide plan, and our advice will refresh automatically, every day.

Customers can also upload their Social Security data file to further personalize their RetireGuide plan.

Most people aren’t on track for retirement.

More than half of American households won’t be able to afford their current lifestyle when they retire,1 and one in three Americans have taken no steps to plan for their financial futures.2

Even when they do plan, it’s not always easy to follow through and take the necessary steps toward a comfortable retirement.

My experience with and passion for this issue is part of the reason we launched RetireGuide earlier this year. People need an easy-to-understand retirement planning tool that gives them personalized retirement advice based on their current financial picture.

RetireGuide takes into account your current savings across all accounts (even those not with Betterment), where you plan to live in retirement, and your current income. It makes it easy to see where you are, what steps to take to get on track, and allows you to put that plan in motion with just a couple clicks.

Now, we’ve taken RetireGuide one step further. You can now sync external accounts, such as your current 401(k), to your Betterment account, and we will automatically update our advice based on the balances of those accounts. You can also upload your Social Security data file to get more precise about your future income streams.

What’s New in RetireGuide?

Synced External Accounts Means More Accurate Advice

You can now sync your external retirement accounts with RetireGuide. These balances will refresh daily, providing a current total retirement savings picture across all accounts. This means our advice to help you reach your retirement income goal is always up to date.

We are compatible with more than 13,000 financial institutions. RetireGuide considers each account type (e.g., Roth IRA, traditional IRA, 401(k)) and its tax status to give you smarter retirement advice.  

Pasted image at 2015_11_16 11_36 AM

Disclaimer: The listing of entities in the above image does not indicate a working affiliation, association, or partnership with Betterment. The entities are listed to show that RetireGuide is compatible with these services and others.

Customizable Options for Social Security

Betterment is one of the Social Security Administration’s (SSA) partners in a new initiative. The SSA recently announced that it will be providing individuals with an easily transferrable data file with the information contained in their annual Social Security benefit statement. Your personal Social Security data file includes both your earnings history and benefit projections.

Did You Know?

Anyone can pull her Social Security data file from SSA.gov and upload it to RetireGuide. Your Social Security data file contains your earnings record as well as estimates for retirement, disability, and survivors benefits.3

Uploading your data file allows RetireGuide to use the SSA’s estimate of your retirement benefits in your plan’s future income stream projections. After uploading, you can even customize the Social Security start age to values not shown on the SSA site—we do the math for you.

However, whether you should use the Social Security statement estimates or RetireGuide’s estimates depends on your circumstances.

Screen Shot 2015-11-16 at 10.06.08 AM

Now you can upload your Social Security data file directly to RetireGuide.

There are strengths and weaknesses of the SSA’s benefit estimate. The main strength is that it is based on your actual earnings history. However, it assumes that you will continue to earn your prior year salary all the way until retirement.

As a result, if you’re younger than 50, you’re probably better off using the RetireGuide estimate of Social Security benefits, which takes into account the fact that you’re likely to earn raises throughout your career. You can even control how much RetireGuide assumes, as well as your starting age, by clicking Edit Assumptions in RetireGuide.

If you’re older than 50, the Social Security estimate is likely to be a fairly accurate portrayal of your expected Social Security benefits. This is because it is based on your actual history of earnings, and real earnings growth generally levels off around age 50.

Optimize Your Social Security benefits

Social Security benefits are largely driven by lifetime earnings, which you can only control so much, especially late in your career. Your benefits are also driven by the age that you begin taking benefits, which you have more control over.

This age doesn’t need to be the same as the one when you actually stop working, because you’ll likely have other savings to live on. In many cases, delaying the start of Social Security benefits can be a smart strategy, given that benefits increase with each year they’re delayed, and they’re guaranteed to adjust for inflation.

Delaying Social Security can also help reduce your overall tax burden in retirement because you spend down traditional IRAs and 401(k)s earlier in order to live while you wait for Social Security benefits to start. This reduces Required Minimum Distributions (RMDs) from those accounts, which are forced withdrawals that result in forced taxes.  

More About RetireGuide

RetireGuide is available to all Betterment customers, allowing them to work through scenarios, like:

  • Am I saving enough money?
  • When can I retire?
  • What will my retirement look like if I don’t increase my savings rate?
  • How will my spending change if I move to a different location in retirement?
  • How much will I have to live on in each year of retirement?
  • Am I using the right kinds of accounts for saving and investing?
  • How can I invest more efficiently for retirement?

RetireGuide uses the information you provide and the balances from your Betterment accounts, as well as assets outside of Betterment, to answer these questions. It also provides a seamless way to start saving more in a globally diversified portfolio of ETFs based on your retirement plan’s recommendations.

This is the only retirement planning tool available to investors today that merges an advice engine with a way to automatically save and invest in a diversified portfolio.

Learn more about RetireGuide, ostart a plan today (it’s included with your Betterment account).

1 Center for Retirement Research at Boston College study

New York Times: Americans Aren’t Saving Enough for Retirement

2 Northwestern Mutual Planning and Progress Study (2015)

3 RetireGuide does not take into account disability or survivor information.

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