Betterment 401K
 | By: Jeremy Biberdorf | March 26, 2022 |
In a Nutshell: Betterment offers a 401K option for businesses that helps individuals create customized profiles for each unique retirement goal. It makes more sense for large companies to go with Betterment’s 401K plan with payroll integration to make it worthwhile.
| Betterment 401K | Total balance | Asset breakdown by type | Employee participation percentage | Average deferral rate | YTD contributions |
Betterment’s 401K plan can save businesses millions with transparency in fees. It has a great interface that’s easy to use and many third-party integrations.
Betterment 401K is best for:
- Large companies with a retirement plan worth millions
- Companies that have payroll integration
Pros and Cons
Pros
- Clear pricing
- Easy-to-use interface
- Payroll integrations
Cons
- Not the best for small companies
Betterment 401K Overview
Betterment is a robo-advisor app and website that now also offers 401Ks under the same brand (Betterment for Business). You can still choose to work with Betterment 401K even if you don’t use its robo-advisor services, but you may incur additional fees.
Betterment 401K is able to create a personalized profile for each employee based on their retirement goals.
The 401K solution provided by Betterment has been in operation since 2016, with the purpose of bringing better investment advice to plan participants compared to competitors and other alternatives.
Betterment 401K Features
What exactly does Betterment for Business offer?
Fees
The fees will differ for every company, but Betterment has 2 very helpful pricing calculators. One focuses on the cost for employers and the other is the cost for employees. If you’re not happy with the result, Betterment for Business also offers a possibly lower price (but users must see if they qualify).
The plan will get top-of-the-line investment advice and everything the platform has to offer.
From what we gather, the more employees you have, the cheaper the cost. It will cost you between the range of $4 to $6 per worker depending on how many you have. As for employee fees, you’re looking at about 0.25% annually in assets and 0.10% in fund fees. Then there is also the third-party administrator (TPA) fee, which is $1,500 a year.
Interface
The web experience of the Betterment 401K platform is very intuitive and user-friendly. It is also mobile-friendly. It doesn’t take much to understand how to navigate.
Protection
Betterment for Business offers fiduciary protection for the sponsor, or in this case, the company. What does this mean? It means Betterment 401K shoulders the responsibility and is legally liable for managing the investment options.
What this does is it shifts the liability from the company to Betterment and the company is not responsible for investment choices. Aside from that, it also takes care of a lot of the work.
Payroll Integrations
In order to make your experience as seamless as possible, Betterment 401K adopts third-party integrations such as ADP and Intuit Online Payroll.
Why is payroll integration important? Because it saves you time and a whole lot of work. Without these integrations, you would have to manually input figures which can be very time-consuming and tedious. You would need to account for all the payroll changes, the correct amount is given/taken out, and then double-check your work to make sure you’ve made no errors.
With the help of ADP and Intuit Online Payroll, all of the above tasks are taken care of.
Benefits for Employees
We’ve taken a look at how great Betterment 401K is for employers, but how does it benefit employees? The Betterment platform really looks out for employees as well as employers. It’s worth it to mention Betterment also has a Roth IRA option for retirement that’s worth the consideration.
As for relying on Betterment for your 401K, you’re in good hands. RetireGuide will help you with retirement financial planning to meet your goals. The advice is customized to your specific needs.
RetireGuide can sync to your external investment accounts with other institutions and then takes a holistic approach, with consideration of where you would like to retire and how much your total household income is to find the best retirement solutions.
Again, we bring attention back to the simple dashboard that accurately depicts everything you need to know and acts as a roadmap to see if you’re on the right path to reaching your goals.
Conclusion
Betterment 401K or Betterment for Business is not the only retirement option out there for companies and employees alike, but it is one of the better ones. The system helps employers manage everything and takes a lot of the work off of their shoulders with third-party integrations. Employees can rest assured knowing that their retirement goals are met with customized investment profiles.
Intrigued? Who wouldn’t be? Click here to find out what Betterment can do for you.
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