How To Use Personal Capital for Retirement Planning

How to Use Personal Capital for Retirement Planning - Simple tools to help plan your retirement through Personal Capital AnalyticsHow To Use Personal Capital for Retirement Planning:

I’m in the process of trying to decide what to do with our retirement accounts.

After my recent discovery that fees were eating up all of my investment profits, I decided it was time to pull my retirement accounts out of auto pilot.

While researching my options I stumbled upon a company called Personal Capital that intrigues me.

Personal Capital is an online wealth management company. They specialize in tax efficient ETF portfolios.

Personal Capital is not an investment research site, it is a dashboard site. The strength of Personal Capital is their free analytics. 

Once you have linked your financial information, you’ll get an instant snapshot of your financial situation.

You can review your income, spending and investment allocations. I also get weekly emails that give me a quick analysis of how my investments performed for the week.

One of the biggest benefits is their retirement planning and investment check-up tools.

The Retirement planning tool uses your personal financial data to help you determine the following factors:

  • Retirement Status – This tool, compares your current financial picture with your retirement goals to determine where you stand. It is kind of scary at times to look at the numbers and see where I’m lacking. At the same time, it is also very helpful to review the tools and see how far I’ve come.
    • The reason I believe this tool is so valuable is because it is constantly updating.
    • Personal Capital - Projected Portfolio ValueThe system updates your retirement status based on your income, spending and the current market value of your investments. It isn’t a static number that you have to recalculate periodically. Personal capital does all the work for you.
  • Expected Retirement Income – This is one of my favorite tools since it allows me to do retirement income estimates.
    • You can adjust your social security income, tax levels, and investment assumptions. I love the flexibility this tool gives me in calculating my potential retirement income.
  • 401K Fee Advisor
    • This tool is critical in my opinion. I can tell at a glance what the expense ratio is for each of my investments. Their system even gives me an estimate of the annual dollar amount associated with these fees.
    • Personal Capital - Retirement Fee AnalyzerThey advertise that they will find the hidden fees as well. Since most of my portfolio is currently in cash, I wasn’t able to test this claim. I really, really wish I had through to run this report before I switched my Roth IRA from a managed portfolio to a self-directed portfolio. I’m sure I would have been sick to my stomach at the amount I was paying – maybe it is better I don’t know.

With all of these tools, I’m able to get a very detail picture of what my retirement could look like based on my current financial situation.

I have a love-hate relationship with this program. I love the analytics but hate how far from my goals I am.

Seeing the hard numbers has really incentivized me to pick up the pace and focus more of my attention on my retirement planning.

Why I like Personal Capital

As part of the intake process, I completed a brief survey that went over my risk tolerance level and gave their computer systems a quick snapshot of my current situation.

From there I was able to use their system to give me investment recommendations.

For example, based on my age and current situation I invest at the high to moderately high-risk level.

Once Personal Capital made this determination, they were able to give me specific recommendations for asset reallocation.

Personal Capital - Recommended Asset Allocation

I can use their allocation recommendation to find investments that work within my portfolio requirements.

Their reporting features are above average.  I have access to all kind of reports with fun graphs and info to my geeky heart’s content.

Personal Capital May Work For You If:

If you are looking for more of a hands-off approach, but want a system with lower broker fees Personal Capital may be a solution for you.

Personal Capital provides their free analytic services to try and get you to sign up for their brokerage accounts.

Their brokerage services are on the higher end for an online advisory service at .89%. Their rate begins to decrease when you have 3 Million invested.

If you have up to $200,000 of investments you have access to a team of advisors who will help you design an ETF portfolio. From there the level of service steadily increases based upon your portfolio.

I had a meeting earlier this week with one of their advisors. He was very professional and knowledgeable. I had a great time discussing finances with him and ended up with a very favorable impression of the company.

However, I doubt I’ll be moving my money to their platform. At this point in the game, I’m just not sold on the .89% fee. I’d like to try managing my own funds again.

I will continue to use the Personal Capital analytics to help me make any future decisions. I love their analytics tools and feel that they are a valuable resource for beginner to semi-experienced investors.

If you are interested in retirement planning I recommend adding your accounts to the system and checking out the status of your retirement. I think you will be happy with the information the Personal Capital analytic system provides.

Please keep in mind that I’m not a financial planner. I’m just an ordinary person who likes to read and do research. Take the time to research this product before blindly signing up.

There are many other online brokerage companies who offer similar services for similar or potentially even lower rates.

I’m just curious to see if any of my readers are currently using Personal Capital. If so do you like their brokerage services? Is the .89% fee worth the returns you are getting with the managed services?

PS. Check out these additional posts related to retirement planning:

Also if you are looking for an amazing book on retirement I recommend Chris Hogan’s book – Retire Inspired.




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