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Which Robo-Advisor Has the Lowest Fees?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Which Robo-Advisor Has the Lowest Fees?

Technology and innovation are making it easier and easier for people to access high-quality, low-cost investment strategies, no matter how much money they have to invest.

The robo-advisor has exploded onto the scene over the past few years, introducing automated investment platforms that recommend, implement, and manage your investment portfolio for you.

And while they all offer most of the same services at a low cost, we decided to dig deep and figure out exactly how much each of these platforms cost.

We looked at two types of fees across five of the major automated investment platforms:

  • Portfolio fees – The cost of the underlying investments. Given that the recommended investment strategy will differ depending on your age and goals, there is actually a range of potential costs for each platform that makes a direct comparison difficult. For our purposes here we posed as a 28 year old making $60,000 per year with $25,000 to invest and have calculated the cost of the recommended strategy for each platform.
  • Advisory fees – The cost of using the investment platform. This is on top of the portfolio fees.

Let’s see how they stack up.

Betterment

Portfolio Fees

For our 28 year old investor, Betterment recommended an aggressive portfolio of 90% stocks and 10% bonds. The total cost for this portfolio is 0.10% per year.

Here’s a detailed screenshot of Betterment’s recommended investment strategy, including the specific ETFs it uses:

Betterment portfolio

Advisory Fees

Betterment has a tiered pricing strategy where the cost for the service depends on the amount of money you have invested with them. Here is how it works:

  • $0-$10,000 invested
    • 0.35% per year if you set up an automatic monthly contribution of at least $100.
    • $3 per month without that automatic monthly contribution.
  • $10,000-$100,000 invested
    • 0.25% per year
  • $100,000+ invested
    • 0.15% per year

The services that come with this fee include:

  • Goal setting (for retirement, emergency fund, one-time expenses, etc.)
  • Automatic rebalancing
  • Tax loss harvesting

WealthFront

Portfolio Fees

Like Betterment, WealthFront recommended an aggressive strategy with 90% of the investor’s money in stocks and 10% in bonds. Because of some differences in the actual ETFs used, the total cost for this portfolio came in slightly higher at 0.16% per year.

Here’s a detailed screenshot of WealthFront’s recommended investment strategy:

Wealthfront portfolio

Advisory Fees

WealthFront is free for account balances of $10,000 or less, though there is a $5,000 minimum investment.

For any amount over $10,000, it charges a flat fee of 0.25%. Some of the services offered as part of this fee include:

  • Automatic rebalancing
  • Daily tax loss harvesting
  • For accounts over $100,000, it offers a service called Direct Indexing that claims to add even more tax-efficiency.

Schwab

Portfolio Fees

Schwab’s new Intelligent Portfolios service offered up a slightly different investment strategy for our 28 year old investor. Here’s what it looked like:

  • 77% stocks
  • 11% bonds
  • 7% commodities
  • 3% cash

Unfortunately, Schwab doesn’t make it clear which specific ETFs it uses, which makes it difficult to determine the cost of this portfolio. However, in its FAQ Schwab states that the total portfolio cost ranges from 0.18% for more conservative strategies to 0.26% for more aggressive strategies.
Here’s a detailed screenshot of Schwab’s recommended investment strategy:

Schwab portfolio

Advisory Fees

Schwab’s service is free no matter your account balance (though there is a $5,000 minimum account balance). Schwab is primarily making money by including some of its own funds within its recommended investment portfolios, which pays them part of the fee included in the portfolio cost above.

This is in contrast to services like Betterment, WealthFront, and WiseBanyan who do not have their own funds and are therefore only recommending funds from other companies.

The services offered include:

  • Automatic rebalancing
  • Tax loss harvesting for accounts over $50,000
  • Goal setting (retirement, emergency fund, etc.)

Vanguard

Portfolio Fees

Vanguard’s Personal Advisor Services mixes the automated investing of other platforms with the personal touch of being able to speak with a real live personal financial advisor. More on the personal advisor below.

Vanguard doesn’t reveal its specific portfolios on its website, but others have found that they closely mimic Vanguard’s already popular target date retirement funds (which, by the way, you can already access on your own).

Assuming that Vanguard’s service would recommend a portfolio similar to its Target Retirement 2050 Fund, and assuming they use Vanguard’s lower cost admiral shares, our investor would end up with a portfolio that is 89.5% stocks and 10.5% bonds and a total portfolio cost of 0.08%.

Here is what that portfolio would look like:

Vanguard portfolio

Advisory Fees

This is where things differ from the other automated investment platforms.

For those with at least $50,000, Vanguard connects you with one of their financial planners who will help you create a customized investment plan. You can also call in to speak with a financial planner any time you have questions, though you only get a dedicated advisor if you have $500,000 more. Those with lower balances call an 800 number and speak with whichever planner they happen to get.

The charge for this personal service is 0.30%.

WiseBanyan

Portfolio Fees

WiseBanyan is relatively unknown compared to its competitors above, but it’s actually the lowest cost offering.

WiseBanyan recommended a slightly more conservative portfolio for our 28-year-old, putting him in a portfolio with 82% stocks and 18% bonds. The total portfolio cost is just 0.09%.

Here’s what the portfolio looks like:

Wise Banyan porfolio

Advisory Fees

WiseBanyan is free for its basic services, which include portfolio implementation and automatic rebalancing.

It is planning to make money by charging users for additional services, which include:

  • Personal tax preparation
  • Tax loss harvesting
  • Concierge services

The cost for these services is not clear on the website, but it’s important to note that you do not have to use them.

WiseBanyan does include some additional fees for certain types of transactions, which are outlined here.

Summary and Other Considerations

Here’s a quick summary of each platform’s portfolio fees, advisory fees, and total cost:

Screen Shot 2015-07-02 at 4.19.18 PM

Now, keep in mind that the portfolio fees will differ depending on the specific portfolio recommended. The numbers here only represent the single recommendation we got for our purposes here.

It should also be noted that while cost is an important factor, things like investment strategy should also be considered. It’s probably not worth investing in anything if you don’t agree with the strategy or you don’t understand it.

Finally, while these platforms have been coined “robo-advisors”, there’s a big difference between a platform that automates your investments and a fee-only financial planner who can help you get a handle on your entire financial situation.

Still, these automated investment platforms are an encouraging step forward for investors. They make it easy to access a low-cost, high-quality investment strategy, and that is always a good thing.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Matt Becker
Matt Becker |

Matt Becker is a writer at MagnifyMoney. You can email Matt here

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The States With the Hardest Working Women

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Americans take pride in their work ethic, but do women in some states put more hours into taking care of their finances, families, homes and communities?

To find out, we analyzed microdata from the American Time Use Survey from the Bureau of Labor Statistics, which asks respondents how many minutes they spent performing different kinds of activities during the previous workday. We averaged the responses of women in the categories across non-leisure activities, which include: the maintenance of the home, work or career, caring for family members or other community members, shopping and volunteer activities.

Because not every person participates in every activity, the number of activities spent on these activities may seem low. For example, the average hours spent working across the states is about three hours – a workday that few will find familiar. That’s because not every woman works, and not every woman with a job works full-time or works Monday through Friday. These numbers also account for the fact that plenty of working people go through stretches of unemployment or underemployment.

For that reason, we also looked at the breakdown of the work status of women in each state. Overall, we expect that women who didn’t spend the previous day at a job spent more time doing other things, such as shopping for their households or volunteering.

This is most likely an understatement of how much time women are spent working, because we didn’t include every possible activity — such as time spent on school work, time spent hiring services, or time spent on self-care — and because some respondents may have taken the day off, or even be retired.

Our analysis revealed that depending on regional cultural norms and employment opportunities, the hardest working women in America spend their time serving their families and communities in diverse ways.

Key takeaways

  • Women in North Dakota are the hardest working in America, spending an average of 8.9 hours a day on non-leisure activities.
  • Women in Washington, D.C. and Vermont take the second and third spots, with averages of 8.3 and 8.2 hours, respectively.
  • Women in Arkansas spend the least time on non-leisure activities, at an average of 6 hours a day.
  • Women in Alabama, West Virginia and Louisiana follow closely, each with an average of 6.1 hours.
  • Women in Washington, D.C. and the Dakotas are the most likely to work full time and women in Utah, West Virginia and Idaho are the least likely.
  • Women in Hawaii are the most likely to work for a full year and women Alaska are the least likely.
  • Women in Vermont spend the most time volunteering and women in Montana spend the least.
  • Alaskan women spend the most time on housework (3.7 hours), while women in Washington, D.C. spend the least (1.3 hours). (But they spend the most time at work).

States with the hardest working women

1. North Dakota

While the women of North Dakota may not spend the most time in the workplace, they’re pretty darn close. They spend 4.6 hours per weekday at work versus Washington, D.C.’s average of 4.9 hours. However, in North Dakota, women spend more time at other labor- and service-related tasks in a capacity which their cosmopolitan counterparts in the nation’s capital do not.

Spending more time at volunteer efforts, household tasks and caring for family members, North Dakota’s women come out on top as the hardest working women in America, putting in an average of 8.9 hours per weekday across activities.

This study isn’t the first of ours where North Dakota broke the top 5. In our ranking of the happiest states, North Dakota came in at No. 5.

2. District of Columbia

Clocking in at 8.3 hours per weekday spent on non-leisure activities, the women of Washington, D.C. are generally career-oriented. (Notably, Washington, D.C. landed the top spot in our ranking of the best cities for working women). Washington, D.C. is the only area we’re measuring, however; it’s essentially a metro rather than an entire state, which may skew how we view the data. The population is more urban and suburban than rural, which may lead to different cultural norms surrounding career expectations and the availability of jobs in the first place.

Women in the District of Columbia spend the least amount of time on housework when compared to other women across the country, and also spend comparatively very little time volunteering. They do have the unfortunate honor of spending the most time in the car in order to get these tasks done, falling behind only the women of Wyoming. (While in Wyoming you’re likely to drive long distances with little traffic in order to get to work, the beltway in DC Is the exact opposite: You’ll more likely to spend a lot of time sitting in gridlock to travel shorter distances than you are in other parts of the country.)

3. Vermont

Women in Vermont may not spend as much time at their nine-to-five (3.5 hours per day) as their peers in North Dakota (4.6 hours per day) and Washington, D.C. (4.9 hours per day) but they do spend a significant amount of their time volunteering (31 minutes per day) and caring for those outside of their own family (15 minutes per weekday).

Travel between daily activities is also a prominent time-consuming task for women of Vermont. With 55 minutes per weekday spent commuting between different non-leisure tasks, the state is second only to Washington, D.C. and Wyoming in terms of commute times.

4. Alaska

The women of Alaska spend dramatically more time taking care of the home than women in other states — nearly four hours per weekday. With an additional hour spent on housework per day than any other state, Alaskan women are the keepers of the homefront.

Women in Alaska also spend more time commuting between non-leisure tasks than most (54 minutes per weekday), though not more than the women of Vermont, Wyoming and Washington, D.C.

5.  Nebraska

Nebraska women spend almost as much time keeping house (2.5 hours per weekday) as they do in the workforce (3.2 hours per weekday). Time spent volunteering (20 minutes per weekday), commuting (42 minutes per day) and caring for family members (25 minutes per weekday) might not be as high as in some of the other states on this list, but cumulatively, they are enough to get the hardworking women of Nebraska into our top 5.

Hardest working women: Full rankings

Want to see where your state ranks? Here are the full rankings for America’s hardest working women.

A closer look at women in the workplace

Women work hard across all sectors, picking up the slack not only when it comes to earning an income, but also stepping up when the home needs tending to or a family member needs one-on-one care.

All of this work is important, but if you want to see the raw numbers concerning only hours spent in the traditional workplace, here is how the states rank:

Managing your money

Balancing the demands of womanhood is no easy feat. While cultural norms are changing, women are still largely expected to serve in unpaid capacities, such as housekeeper, personal care assistant and personal shopper. When you add employment on top of this, it can be a lot to handle.

While trying to juggle it all, there’s one task that always needs to be on your priority list: Your personal finances. Whether you’re in D.C. and working in a full-time capacity or struggling to find work in West Virginia, you’re going to need to budget. The tools outlined here help automate the budgeting process, saving you time as you evaluate what you can and cannot afford in your busy, day-to-day life.

If you’ve gone a while without budgeting, or you are simply in a bad financial situation due to lack of local employment opportunities, there’s a good chance you’re sitting in some debt. If that debt has become too much for you to handle or is sitting on a high-interest credit card, your financial situation is likely to get worse rather than better. One solution to this problem is debt consolidation.

However you choose to manage your finances and balancethem with other priorities, take time to appreciate the hard work you put in day to day.

Methodology

Using microdata from the Bureau of Labor Statistics’ American Time Use Survey, analysts created statewide averages for female for the years 2015 through 2017 in the following categories:

  • Household tasks
  • Caring for family members
  • Caring for non-family members
  • Work and work-related activities
  • Consumer shopping
  • Volunteering
  • The sum of time spent traveling for all the activities above

The work status of women in each state was derived from the Census Bureau’s 2017 5-Year American Community Survey and is limited to women between the ages of 16 and 64.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brynne Conroy
Brynne Conroy |

Brynne Conroy is a writer at MagnifyMoney. You can email Brynne here

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The Most Popular Retirement Destinations for Seniors

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Many of us look forward to that sweet day when we’ll never have to set an alarm again. You have no boss, no deadlines and no meetings. Most of us would agree that retirement sounds pretty awesome. Which is why it is so important to plan for it properly.

When it comes time to choose where to live, cost of living and general livability for retirees are typically the two main concerns. In past studies, we have endeavored to look at a cross section of retirees’ concerns, so we can rank the best places to retire. But sometimes, the best places to retire doesn’t always line up with where retirees actually move. We hope to shed some light on senior retiree preferences by finding the top retirement destinations. Here’s a look at the most tempting locations.

Key findings

  • The top 25 retirement destinations is dominated by Arizona and Florida metros. Those two states account for 15 of the 25 metro areas with highest net migration of retirees.
  • The Phoenix metro area was the runaway favorite. This area attracted 19,550 new seniors. Only about 12,421 opted to leave. That left a net influx of 7,129 retired seniors making Phoenix their home.
  • Only two metro areas not in Arizona or Florida made it to the top 10: Milwaukee and Nashville, Tenn. Milwaukee saw a net influx of 3,924 retirees, while Nashville gained 2,831.
  • The busiest and least-affordable metros saw the largest loss of retirees. Cities like New York, Los Angeles, Seattle and San Francisco tend to lose those who left the workforce. This exodus of retirees does slightly help balance population crises in cities like San Francisco which lost 2,731 retirees.
  • Weather and a sense of “affordability” aren’t the only factors attracting retirees. Florida and Tennessee in particular, and Arizona to a lesser degree, have extremely retiree-friendly tax laws. Florida does not tax any kind of retirement income and has relatively low property and sales taxes. Likewise, Tennessee does not tax social security income, which, apart from the BBQ and music, may explain why Nashville is a top 10 retiree destination.
  • California experiences the biggest loss of retirees. Of the 18 California metro areas we analyzed, 14 saw a net decrease in retirees.

Most popular retirement destinations

Phoenix stole the number one spot that retirees are flocking to. But if you prefer less desert and more beach, Tampa, St. Petersburg and Clearwater, Florida came in second place. If you’d take a lake over a beach any day, Lake Havasu City in Arizona made its way into the top 10. And thanks to their low cost of living, midwestern cities may be the perfect place to spend your golden years.

If the top 10 is sounding a little crowded for your taste, you could hop on over to the Pacific Northwest. Slightly less popular – but still highly ranked – is Portland and surrounding metro areas in Oregon and Washington. The Portland-Vancouver-Hillsboro area in Oregon and Washington ranked 11th place. And Eugene, Oregon was also highly ranked as the 19th most popular retirement destinations for seniors. We have to say, Portland has a pretty stellar reputation. We found in a previous study, that Portland ranks seventh as one of the best places to live in America if you’re looking for a balanced lifestyle.

The South is looking mighty appealing too. Of course, plenty of spots in Florida made the list, but so did Nashville, Tenn. Who’s ready for some BBQ? If you desire even more southern charm, check out the Greenville-Anderson-Mauldin region of South Carolina.

Humidity got you down? Golden coast California didn’t make it into the top 10. Hint: high real estate prices. But sunny San Diego ranked 23rd, which is not too shabby.

Least popular retirement destinations

The New York metro area ranked number one in our list of the least popular retirement destinations for seniors. Chicago, Philadelphia and Los Angeles didn’t fare too well either.

Dream locations like Honolulu, Hawaii, and Orlando, Florida didn’t rank as highly as one would think. And on a not so surprising note, bustling metro areas full of workers bees weren’t desirable spots either. Apparently, there is a lot less need for early bird specials in Los Angeles, San Francisco, Atlanta, New York, Seattle and Chicago.

Be prepared for retirement with these tips

Preparing to retire is a big financial undertaking. One you should take seriously and plan for. Consider these tips as you prep for retirement.

Take advantage of catch-up contributions: If you find yourself over the age of 50 and getting ready to retire but fell behind on saving money, you may want to take advantage of catch-up contributions. Usually, the maximum contribution limit to a 401(k) is $18,500 and to an IRA is $5,000. But for those over 50 years of age, catch-up contributions are more flexible, allowing those total contribution limits to be $24,500 and $6,500, respectively.

Adjust your budget: Tightening your budget so you can see how you’ll live on your new income can help you prepare for the adjustment to life in retirement. You may want to consider saving for unexpected expenses like travelling, assisting family and friends and the potential need for medical care or the option of living in an assisted living facility.

  • The 4% withdrawal rule: Generally you’ll need to withdraw around 4% from your nest egg each year. This means that if you have $1 million saved for retirement, you would withdraw $40,000 each year for costs like food and medical supplies. This is just one way of looking at the expected cost of retirement.
  • 75% of income rule: You can also follow the principle of the 75% of income rule. This guideline advises that you should spend between 75% to 85% of your current annual income each year in retirement. Generally your expenses drop after retirement, so ideally this should be enough income for you to live comfortably.

Review and pay off debt: Taking care of debt before you retire is something to seriously plan for. Seniors with credit card debt have a net worth worth of 43% less than those without credit card debt. The high interest rates associated with credit cards can destroy nest egg income.

Because the average credit card interest rate is 14%, seniors who have credit card debt (on average, $4,786) will pay an average of $670 every year for interest charges. With the average investment portfolio not earning more than 8% every year, seniors will on average earn only $4,508 from their portfolio. Sadly, this means that credit card interest can eat up more than 15% of a nest egg income.

Methodology

Data comes from Integrated Public Use Microdata Series (IPUMS). In order to rank the top retirement destinations for seniors, researchers looked at two metrics. Specifically we looked at the number of residents over 65 who were out of the labor force who moved into a metro area and compared it to the number of over 65 residents who were out of the labor force who moved out of a metro area. Those two numbers were then combined to create a net migration figure. This study is ranked based on that net migration figure.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jacqueline DeMarco
Jacqueline DeMarco |

Jacqueline DeMarco is a writer at MagnifyMoney. You can email Jacqueline here

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