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Improving Retirement Planning with Synced External Accounts

Betterment's retirement planning advice aims to give you personalized answers based on your whole financial picture. For that, syncing external accounts is critical.

Articles by Alex Benke, CFP®

By Alex Benke, CFP®
VP of Advice and Investing, Betterment
Published: November 16, 2015 | Updated: November 2, 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 developed integrated retirement planning advice into Betterment. People need easy-to-understand retirement planning advice based on their current financial picture.

Betterment’s retirement advice takes into account your current savings across all accounts by syncing in external accounts not held at Betterment. Our automated planning also utilizes information on 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.

Particularly important to how we offer retirement advice is the ability to sync in external accounts, such as your current 401(k). This enables Betterment to get more precise about your future income streams.

How do external accounts help make our retirement planning advice more accurate?

While external accounts can be manually added, synced accounts in particular help our advice remain as accurate as possible by updating balances regularly. As you plan for retirement, it’s important to have a current sense of your total retirement savings picture across all accounts.

Betterment syncs with more than 13,000 financial institutions, and our retirement advice considers each account type—i.e. roth IRA, traditional IRA, 401(k), and others—as well as the account’s tax status to give you smarter retirement advice.

What kinds of questions does our retirement planning advice help answer?

Having a retirement goal within Betterment is part of what every customer can benefit from. You can work through a number scenarios, including:

  • 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?

To help you pursue a retirement goal, we use the information you provide and the balances from your Betterment accounts, as well as assets outside of Betterment, to answer these questions.

Start pursuing a retirement goal today.

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)

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