Best Features of Empower Retirement
1. Income Projector: Your Financial Crystal Ball
Empower Retirement’s Income Projector is a sophisticated tool that provides a detailed glimpse into your financial future. This feature uses complex algorithms and real-time data to create a comprehensive projection of your retirement income.
To use the Income Projector, you’ll input your current savings, contribution rates, and investment choices. The tool then runs thousands of simulations, taking into account various factors such as market volatility, inflation, and potential life changes.
The result is a clear, actionable projection of your retirement income.
One of the most valuable aspects of the Income Projector is it’s interactive nature. You can adjust different variables to see how they impact your future income in real-time.
For example, you might increase your contributions by 1% or push your retirement date back by two years.
With each change, you’ll immediately see how it affects your projected retirement income.
For best results, make it a habit to revisit the Income Projector regularly. As your life circumstances change, so should your retirement strategy.
By checking in quarterly, you can confirm your retirement plan stays aligned with your current situation and future goals.
2. Managed Accounts: Your Personal Financial Advisor
Empower Retirement’s Managed Accounts feature provides personalized investment management for those who prefer professional guidance. This service combines sophisticated algorithms with human expertise to create a tailored investment strategy for each user.
The Managed Accounts service considers various factors when creating your investment strategy:
- Age
- Risk tolerance
- Retirement goals
- External factors (e.g., other savings, expected Social Security benefits)
A key advantage of this feature is it’s dynamic nature. As you age or your circumstances change, the Managed Accounts service automatically adjusts your investment mix.
This ensures your portfolio stays optimized for your current situation and long-term goals.
While the Managed Accounts service does come with an extra fee, many users find the peace of mind and potential for improved returns well worth the cost. However, it’s essential to carefully consider your personal financial situation and goals before deciding if this service is right for you.
3. Financial Wellness Program: Holistic Financial Health
Empower Retirement’s Financial Wellness program extends beyond traditional retirement planning. This comprehensive feature addresses various aspects of your financial life, recognizing that retirement planning doesn’t exist in isolation.
The Financial Wellness program includes:
- Educational resources on budgeting and debt management
- Information on estate planning
- Guidance on healthcare costs in retirement
- Interactive tools for financial planning
- Personalized recommendations based on your financial situation
A standout element of this program is the student loan repayment feature. If your employer opts in, they can make contributions to your retirement account based on your student loan payments.
This innovative approach helps younger workers balance debt repayment with saving for the future.
By providing a holistic view of your financial health, the Financial Wellness program empowers you to make informed decisions about your present and future financial well-being.
4. Mobile App: Retirement Planning at Your Fingertips
Empower Retirement’s mobile app serves as a portable retirement command center. This powerful tool allows you to manage your retirement account from anywhere, at any time.
Key features of the mobile app include:
- Viewing account balances and performance
- Making contribution changes
- Adjusting investment mix
- Taking out loans (if your plan allows)
- Biometric security features (e.g., fingerprint or facial recognition)
One of the app’s most valuable features is it’s account aggregation capability. You can link all your financial accounts, providing a comprehensive view of your financial situation.
This holistic perspective makes it easier to make informed decisions about your retirement savings and overall financial health.
The app’s user-friendly interface and robust security measures confirm that managing your retirement account is both convenient and safe.
5. Retirement Readiness Score: Quantifying Your Financial Future
The Retirement Readiness Score is a unique feature that distills the complex factors of retirement planning into a single, easy-to-understand number. This score, typically presented as a percentage, shows how well you’re tracking towards your retirement goals.
A score of 100% suggests you’re on track to replace 100% of your current income in retirement. However, the true power of this feature comes from it’s actionability.
If your score is lower than desired, Empower Retirement provides specific steps to improve it, such as:
- Increasing your contributions
- Adjusting your investment mix
- Planning to work a few years longer
The Retirement Readiness Score updates in real-time as you make changes to your account or as market conditions shift. This provides a constant pulse on your retirement health, allowing you to make timely adjustments to your strategy.
6. Plan Health Dashboard: Empowering Employers
For employers, Empower Retirement offers the Plan Health Dashboard, a powerful tool that provides a comprehensive view of how well the retirement plan serves employees.
The dashboard tracks several key metrics:
- Participation rates
- Average contribution rates
- Investment diversification across the workforce
It also provides benchmarking data, allowing employers to compare their plan against industry standards.
Beyond these quantitative measures, the Plan Health Dashboard offers actionable insights. For instance, if participation rates are low, it might suggest implementing an auto-enrollment feature.
If employees aren’t diversifying their investments sufficiently, it could recommend expanding the available fund options.
This feature enables employers to make data-driven decisions about their retirement plans, ultimately leading to better outcomes for employees.
7. Flexible Plan Design: Customization for Employers
Empower Retirement offers a highly flexible plan design feature for employers, recognizing that retirement plans aren’t one-size-fits-all. This flexibility allows employers to tailor their retirement plans to their specific workforce needs and company culture.
Options in the flexible plan design include:
Auto-enrollment: This feature automatically signs up new employees for the retirement plan, dramatically increasing participation rates. Employers can set the default contribution rate and investment options.
Auto-escalation: This option gradually increases employee contribution rates over time. For example, contributions might increase by 1% each year until reaching a predetermined cap.
Customizable employer matching: Employers can structure their contributions in ways that best incentivize employee saving. This might include matching a certain percentage of employee contributions up to a specific limit.
Roth options: This gives employees the choice between traditional pre-tax contributions and Roth contributions, allowing for more personalized tax planning.
The flexible plan design feature empowers employers to create a retirement plan that aligns with their company’s goals and their employees’ needs.
8. Investment Options: Diverse Choices for Every Investor
Empower Retirement offers a wide array of investment options to suit different risk tolerances, investment goals, and levels of financial expertise.
These options typically include:
Target-date funds: These funds automatically adjust their asset allocation as you approach retirement, becoming more conservative over time.
Index funds: These low-cost funds track specific market indices, providing broad market exposure.
Actively managed funds: These funds are managed by professional investors who aim to outperform the market.
Stable value funds: These conservative options aim to preserve capital while providing steady returns.
Self-directed brokerage accounts: For more experienced investors, this option allows you to invest in person stocks, bonds, and a wider range of mutual funds.
The diversity of investment options ensures that whether you’re a hands-off investor preferring a set-it-and-forget-it approach or an active trader wanting more control, you can find suitable investments within your Empower Retirement account.
9. Education and Resources: Empowering Financial Literacy
Empower Retirement provides a wealth of educational resources to help you make informed decisions about your retirement savings. These resources cater to various learning styles and levels of financial knowledge.
Educational offerings include:
Webinars: Live and on-demand webinars cover topics ranging from basic retirement planning to advanced investment strategies.
Articles and guides: In-depth articles and downloadable guides explain complex financial concepts in easy-to-understand language.
Calculators and tools: Interactive tools help you model different scenarios and understand the impact of your financial decisions.
One-on-one consultations: Many plans offer the option to speak with a financial advisor for personalized guidance.
By providing these educational resources, Empower Retirement aims to increase financial literacy and empower you to take control of your retirement planning.
10. Withdrawal and Distribution Options: Flexibility in Retirement
Empower Retirement offers various withdrawal and distribution options to provide flexibility when you reach retirement age.
These options typically include:
Lump-sum distributions: You can withdraw your entire account balance at once.
Partial withdrawals: You can take out a portion of your account while leaving the rest invested.
Systematic withdrawals: You can set up regular, scheduled withdrawals to provide a steady income stream.
Required Minimum Distributions (RMDs): For traditional 401(k) accounts, Empower Retirement can help you calculate and distribute your RMDs once you reach the required age.
Rollovers: If you leave your job, you can roll over your 401(k) to an IRA or a new employer’s plan.
The variety of withdrawal options allows you to tailor your retirement income strategy to your specific needs and circumstances.
Frequently Asked Questions
What is Empower Retirement?
Empower Retirement is one of the largest retirement services providers in the United States. They offer 401(k), 403(b), 457, and other retirement plans to millions of participants across the country.
How does the Income Projector work?
The Income Projector uses your current savings, contribution rates, and investment choices to run thousands of simulations. It factors in market volatility, inflation, and potential life changes to provide a projection of your retirement income.
What are the fees associated with Empower Retirement’s Managed Accounts?
Fees for Managed Accounts typically range from 0.30% to 0.60% of your account balance annually, depending on the size of your account. It’s best to check with your specific plan for exact fee information.
Can I access my Empower Retirement account on my phone?
Yes, Empower Retirement offers a mobile app that allows you to view your account, make changes to your contributions, and adjust your investments from your smartphone.
What is a good Retirement Readiness Score?
A score of 80% or higher generally shows you’re on track to replace a significant portion of your income in retirement. However, the ideal score can vary based on person circumstances and retirement goals.
Does Empower Retirement offer Roth 401(k) options?
Many Empower Retirement plans offer Roth 401(k) options, but it depends on your specific employer’s plan design. Check your plan details or contact Empower Retirement directly to confirm.
How often should I review my retirement plan?
It’s generally recommended to review your retirement plan at least once a year or whenever you experience significant life changes such as marriage, birth of a child, or change in employment.
Can I take a loan from my Empower Retirement 401(k)?
Many Empower Retirement plans offer loan options, but this feature depends on your specific employer’s plan design. Check your plan details for loan availability and terms.
What happens to my 401(k) if I leave my job?
If you leave your job, you typically have several options: leave the money in your current 401(k) plan, roll it over to a new employer’s plan, roll it over to an IRA, or cash it out (though this may result in penalties and taxes).
How does auto-enrollment work in Empower Retirement plans?
If your employer has enabled auto-enrollment, you’ll be automatically signed up for the 401(k) plan when you become eligible. A default contribution rate and investment option will be selected for you, but you can change these at any time.
Key Takeaways
- Empower Retirement’s Income Projector provides a dynamic, real-time view of your retirement future.
- The Managed Accounts feature offers personalized investment management for those seeking professional guidance.
- The Financial Wellness program extends beyond retirement, addressing overall financial health.
- The mobile app puts powerful account management tools at your fingertips.
- The Retirement Readiness Score simplifies complex retirement factors into an actionable metric.
- For employers, the Plan Health Dashboard and flexible plan design options provide powerful tools for optimizing their retirement offerings.
- A diverse range of investment options caters to different investor profiles and risk tolerances.
- Comprehensive educational resources empower users to make informed financial decisions.
- Flexible withdrawal and distribution options provide adaptability in retirement.
- Regular engagement with your Empower Retirement account and it’s features can significantly enhance your retirement planning efforts.