Category : uncategorized

The fees are falling! The fees are falling!

You might say our tried-and-true way to a healthier 401k is starting to catch on – partly through the leveraging of lower fund fees. According to a recent report from the Center for Retirement Research at Boston College, a growing number of lawsuits against plan sponsors (employers) are starting to put the spotlight on hidden fees hitched to high-cost funds.

This is obviously a good thing, but just remember: Although this is leading some companies to tweak their fund offerings with lower fees, they still may not have their employees’ best interests in mind, but rather to avoid getting hit with further litigation. What’s more, because of the lack of specific guidance from the Labor Department, employers may not even know of their rules violations until the agency comes after them or they’re greeted with a lawsuit.
Of course, the fallout from increased litigation could lead to lower fund fees for many employees, but it could eventually leave an opposite impact on those with a 401k plan who work at smaller companies.

That’s because the largest plans with the most assets are usually the ones more able to negotiate lower fees, with small employers least equipped to handle the complexities of fund fees. Plus, as the threat of litigation escalates, so too could the potential threat of a discontinuation of smaller 401k plans altogether.

Fortunately, with blooom as your trusted advisor, you can rest easy knowing we’re making the most of what’s available to you by reducing fees wherever we can. We make managing your 401k simple, smart and affordable by leveraging the right funds with lower fees to optimize your retirement savings.

Read More

401k Q&A

The following questions are real, and we hope our answers are real helpful. See what’s on the enquiring minds of our actual members as we tackle anything and everything (you’ll see) happening with regards to their – and your – 401k.

 

“I’m on vacation and turned on the news this morning. I’m four years away from retirement and wondering what you’re going to do with my account if/when Trump starts WWIII.”

My first most important piece of advice for you while you’re on vacation, especially given everything going on in the world right now is to avoid the TV and as much access to the outside world as possible. Secondly, even in the unlikely event that we were to find ourselves in the middle of WWIII, no one knows what that would mean for stocks. I think we can be pretty certain that in the short term we’d see some significant volatility, but shockingly, stocks have actually done extremely well historically during just about every major war. History can be comforting, but there are of course no promises that another war would see the same results for stocks. Rather than trying to guess or panic and risking future growth on your account IN retirement, it’s important to remember that this is exactly why global diversification using both stocks AND bonds is so important. A heavy portion of your account should be held in fixed income, which potentially reduces any stress to your portfolio.

 

“Since Bitcoin is under $10k again, I want in. How can I do that in my 401k? And tell me why I shouldn’t. It is the future of money after all.”

Don’t mistake Bitcoin and other cryptocurrencies for an investment, especially in an account with a very high priority goal like retirement. First off, you’re not going to have a way to get exposure to cryptocurrencies in your 401k as things stand today. And even if you could, I wouldn’t put anything into Bitcoin or other cryptocurrencies that you wouldn’t be okay losing all of within your first 20 minutes of entering a casino.

 

“I was wondering if medical marijuana stocks are worth betting on in their current early stages. I would love some more insight on who to keep my eyes on.”

We’ll be blunt: Although individual stocks are outside our area of expertise, any investment in a single stock or sector is going to carry a higher risk than a diversified portfolio. So, it’s important to keep the investment to a small portion of your overall wealth. There may be some funds or ETFs targeted at the sector, and that would be a good way to diversify more than a single stock. In most emerging sectors, it’s very hard to predict which companies in that sector are going to succeed. You could be right on the success of the sector, but pick the wrong stocks within that sector and miss the gains entirely. A sector fund or ETF is a good way to minimize that risk.

 

*The information is provided for discussion purposes only and should not be considered as advice for your investments. Investing involves risk. Your investments are subject to loss of principal and are not guaranteed.

Read More
CEO passes the torch

CEO Chris Costello Passes The Baton

Five years ago, Kevin Conard, Randy AufDerHeide and I started meeting to talk about our big idea: A company that could change the way average Americans without huge retirement accounts saved for retirement. We would put our kids to bed and then work into the wee hours of the morning in Randy’s basement. Never did the three of us imagine that five years later, we would have built the company that exists today. We have 30 employees who manage more than $2 billion for almost 20,000 clients all across the country, using a totally disruptive technology model.

In the beginning, we just sought to build something to help average Americans get access to professional financial help. Especially the vast majority of folks who don’t have huge retirement accounts – folks just like my own mom and dad.

A Growing Company

Once blooom launched, I had in the back of my mind the thought that we might reach a point at which the company’s size and complexity would require someone with a much more expansive “executive tool kit” and experience to take the company to the next level.

In 2016, we hired Matt Burgener as our chief marketing officer. I know a few of us thought that if I was to get hit by the proverbial bus, Matt would be a great candidate to take the CEO spot. He has an impressive background and was so committed to blooom’s mission that he relocated his family from Dallas to Kansas City to join the company.

Well, I am relieved to tell you that I did not get hit by that bus. But after working closely with Matt over the past 15 months, it has become abundantly clear to me and those around me that Matt is the right person to take over as CEO to lead blooom into the future. I’m thrilled to report that Matt’s experience and counsel played a huge role in blooom’s rapid growth over the past year and a half.

What’s Changing Now

After much discussion with Kevin, Randy and my wife, and with the support of the blooom Board of Directors, I am transitioning the role of CEO to Matt.

I will stay on as chairman of the blooom Board of Directors, and I will remain deeply involved at the company level. I will continue to do what I love – help people secure their futures by saving and investing wisely. To that end, I’ll happily continue to be the face of blooom externally, doing media appearances and speaking engagements, acting as chief evangelist and leading client education, among other things.

This was not an easy decision, but I have always felt I would do what is in blooom’s best interest. Truthfully, I now believe this is a situation in which blooom gets to have its cake and eat it, too, because we’re both playing to our individual strengths. Matt is a seasoned executive with deep experience in scaling companies, and I get to focus on the things I do best: speaking externally about our mission to change average Americans’ financial lot in life.

Looking Forward

I’m excited to see how blooom will grow in this next phase under Matt’s leadership, and I look forward to continuing to build on our goal of bringing simplified financial advice and services to millions of Americans.

Read More

What Kind of 401k Lover Are You?

Valentine’s Day puts a lot of focus on being in a relationship. If you’re reading this blog it probably means that you ARE in a relationship with your 401k, which is great! But just because you’re in a relationship doesn’t mean everything is perfect.

Odds are you fall into one of these six kinds of relationships with your 401k. Let’s put them under the microscope and see what’s going well and what flaws might exist.


The Giver

You are constantly contributing to your 401k. 10%, 15%, or 20%―it doesn’t matter. Anything to keep your 401k by your side all the way to retirement. You don’t care what funds you’re in or whether you get an employer match.

Pros: Contributing is numero uno when it comes to a happy relationship with your 401k, and giving all you’ve got to your 401k can cure a lot of ills.

Cons: The $$$ you put in your 401k should be working for you and not the other way around. Throwing your hard earned cash into a money market account or a high fee investment that doesn’t do anything for you can lead to heartbreak.

Things you might say to your 401k: Oh, you only had a 2% rate of return this year? It’s not your fault. Let me just up my contribution level to make you feel better.


The Taker

You set up your 401k… isn’t that enough? Why do you need to check in on it? It should just be grateful that you contribute a few bucks every paycheck.

Pros: Not looking at your 401k and over thinking it can be a virtue.

Cons: If the foundation of the relationship isn’t there, or if you’re not properly invested, this relationship could be going nowhere.

Things you might say to your 401k: Stop complaining, I could be spending my money elsewhere.


The Controller

One look at you and anyone can tell you care about your 401k. You are very attentive, but somewhere in all that effort you’re putting towards your 401k, you may start to suffocate it with your demands and restrictions.

Pros: You care, you really REALLY do. Attention is important after all, it’s your retirement we’re talking about.

Cons: Too much attention can lead to irrational reactions.

Things you might say to your 401k: What do you mean, your balance is less this statement than last statement? This relationship is OVER!


The Enthusiast/Thrill Seeker

You are always looking for something new. Investing in the same funds just doesn’t do it for you. You’re willing to be a little reckless if it means your portfolio is different from others.

Pros: You live on the edge and are likely to take on more risk in your investments, which can net out.

Cons: 401ks are a long term deal, so changing it up constantly and seeking out the new can lead to betting it all on a potentially bad choice – see bitcoin.

Things you might say to your 401k: Bonds? What are those? Hey baby, let’s time the market.


The Overlooker

You know your relationship with your 401k has problems. Maybe you’re under-diversified or have a high expense ratio, but it’s not “that bad”.

Pros: You’re aware. As they say: knowledge is half the battle.

Cons: Close only counts in hand grenades and horseshoes. This is your retirement and every dollar counts. Every opportunity you miss to fix what you know is wrong is money left on the table.

Things you might say to your 401k: I’ve been with my financial advisor for years. Who cares if he charges me too much to rebalance you?


The Jealous One

You are constantly looking at other people’s 401ks and seeing what they have that you don’t – better funds line ups, more money, rate of return, etc.

Pros: You want your 401k to be the best. That’s why you’re always looking around.

Cons: Not all 401ks are the same and neither are individual financial situations. Measuring your 401k against someone else’s is a fool’s errand and can get you off track or distracted.

Things you might say to your 401k: Bob’s 401k grew 15% this year. Why did you only grow 12%?


Want to take your 401k relationship to the next level? Start with a free analysis with the experts at blooom.

 

Start Your 401k Analysis

Read More
Piggy bank with gold medal

How Blooom Uses Olympic Skills to go for the 401k Gold

In just a few days the Olympic Games will get underway: The world’s best will be going toe to toe to determine who will take home the gold. Did you know that getting a gold medal pays? For US athletes, it means $25,000 into their bank account. Not too shabby…

$25K is a great payday, but you don’t have to be a determined Olympian to optimize your finances. After all, blooom estimates that its average client saves more than $41,000 in hidden investment fees alone over their working careers*.

Lessons from Olympic athletes

Piggy bank playing hockey

Athlete: Ryan Zapolski

Discipline: Men’s Hockey

401k tip: Blocking hidden fees

 

As goalie for Team USA, Zapolski’s job is keeping the puck out of the net. The more the opponents score, the harder everyone on his team has to work to win. Likewise, when investors are incurring high fees, their investments have to work double time to make up for money that’s being taken out of the account. Just like Zapolski does with the puck, blooom works to keep hidden investment fees out of your proverbial 401k net.

Piggy bank curling

 

Athlete: Nina Roth

Discipline: Women’s Curling

401k tip: Risk tolerance

 

In curling, the goal is literally to get as close to the target as possible. The same goes for retirement. When Roth throws her curling stone, she has to make sure she throws it aggressively enough to reach the target, but not too hard—risking missing it completely. As the stone gets closer to its goal, her teammates work to direct the stone down the perfect path. When you tell blooom your glide path (years to retirement), we adjust your investments and risk accordingly, to help you hit your goals.

 

Piggy bank figure skating

 

Athlete: Nathan Chen

Discipline: Men’s Figure Skating

401k tip: Diversification

 

Chen might be known for his vaunted quad jumps, but it’s not all he does on the ice. He also skates gracefully, mixing in other moves like the camel spin, step sequence and the Salchow. Like a balanced, diversified portfolio, Chen knows it takes more than just one move (or fund) to win the gold.

Piggy bank on a skeleton

 

Athlete: Kendall Wesenberg

Discipline: Women’s Skeleton

401k Tip: Rebalancing

 

When Wesenberg is flying down a patch of ice at over 80 MPH, she knows it’s the little tweaks, like a tilt of the head or shift of the shoulders, that make the difference between winning and losing. The same goes for your 401k. While your path to retirement doesn’t move nearly as fast as the skeleton, blooom regularly makes small tweaks to your investments. This helps your 401k get on the medal podium when you cross the retirement finish line.

Piggy bank speed skating

 

Athlete: J.R. Celski

Discipline: Men’s Short Track Speed Skating

401k Tip: Getting professional help

 

Short track speed skating is riddled with obstacles and other competitors to knock you off track… or out of the race completely. Knowing how and when to react will be an important factor in Celski’s ability to win the race. Much like the chaos of the short track, the stock market goes up, down and all-around over the course of a person’s lifetime. Having a trusted partner to help you read what’s happening and make sense of it all can be the difference in making the right move or crashing out of the race.

Ready to join the team?

Get the 401k Gold

Becoming an Olympian is hard work and so is having a great 401k. Luckily for you, rocking your 401k isn’t an individual sport. Linking up your 401k to blooom is like joining the Dream Team.
U-S-A! 401k!

 

* $41,456 investment fee savings based on median blooom client 401k balance of $47,131. Assuming $5,000 annual contribution, pre-blooom investment expense ratio of .56%, post-blooom investment expense ratio of .22%, and 30 years until retirement as of January 9, 2018. Blooom is limited to the funds available in your employer sponsored retirement account. There is no guarantee blooom can or will reduce your fund expenses.

Read More
1 2