A Comprehensive Look at Your Retirement Partner

Empower Retirement Review

Introduction

Retirement planning can feel like navigating a complex maze. With so many options, providers, and financial jargon, it’s easy to feel overwhelmed. That’s where Empower Retirement comes in. As one of the largest retirement services providers in the United States, Empower aims to simplify the retirement planning process and help people secure their financial futures.

In this comprehensive review, we’ll examine Empower Retirement’s offerings, strengths, and potential drawbacks. We’ll explore their range of retirement plans, investment options, digital tools, and customer service to help you decide if Empower is the right fit for your retirement needs.

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The Empower Retirement Story

Empower Retirement was formed in 2014 through the merger of three established financial services companies: Great-West Financial, J.P. Morgan Retirement Plan Services, and Putnam Investments.

This consolidation created a retirement services powerhouse that quickly rose to become the second-largest retirement plan provider in the United States.

Today, Empower manages over $1.1 trillion in assets for more than 12 million participants. Their rapid growth and substantial market share show their ability to meet the diverse needs of both individual savers and employers seeking retirement plan solutions.

Retirement Plan Offerings

Empower Retirement offers a wide array of retirement plans to suit various needs and employment situations. Let’s take a closer look at their primary offerings:

401(k) Plans

The 401(k) plan is Empower’s flagship product. These employer-sponsored retirement savings plans allow employees to contribute a portion of their salary on a pre-tax basis.

Empower’s 401(k) plans come with several features designed to enhance savings:

Automatic Enrollment: Many Empower 401(k) plans include automatic enrollment for new employees.

This feature helps combat procrastination and confirms that employees start saving for retirement as soon as they’re eligible.

Catch-Up Contributions: For participants aged 50 and older, Empower facilitates catch-up contributions.

This allows older workers to boost their savings in the years leading up to retirement.

Roth 401(k) Option: Some Empower plans offer a Roth 401(k) option.

This allows participants to make after-tax contributions, with the benefit of tax-free withdrawals in retirement.

Employer Matching: Many Empower 401(k) plans include employer matching contributions, effectively providing free money to boost retirement savings.

403(b) Plans

Empower offers 403(b) plans for employees of public schools, non-profit organizations, and certain religious organizations. These plans function similarly to 401(k)s but are tailored to the specific needs of these types of employers.

457 Plans

For state and local government employees, Empower provides 457 plans. These plans offer unique benefits, such as the ability to contribute more in the years leading up to retirement.

Individual Retirement Accounts (IRAs)

In addition to employer-sponsored plans, Empower offers both Traditional and Roth IRAs for individual savers. These accounts provide tax advantages and flexibility for those looking to supplement their workplace retirement savings or save independently.

Defined Benefit Plans

For employers looking to provide guaranteed retirement income for their employees, Empower offers defined benefit plan solutions. These plans, often referred to as pension plans, provide a specific benefit amount to employees in retirement based on factors such as salary and years of service.

Investment Options

A crucial aspect of any retirement plan is the available investment options. Empower Retirement provides a diverse range of investment choices to suit various risk tolerances and investment strategies.

Target Date Funds

For participants who prefer a hands-off approach, Empower offers target date funds. These funds automatically adjust their asset allocation as the participant approaches retirement, becoming more conservative over time.

This “set it and forget it” option can be particularly appealing for those who don’t want to actively manage their investments.

Mutual Funds

Empower provides access to a wide array of mutual funds from various fund families. These include options for different asset classes, such as domestic and international stocks, bonds, and real estate investment trusts (REITs).

Exchange-Traded Funds (ETFs)

For those who prefer the flexibility and potentially lower costs of ETFs, Empower offers a selection of these investment vehicles across various asset classes and sectors.

Self-Directed Brokerage Option

Some Empower plans include a self-directed brokerage option. This feature allows more experienced investors to access a broader range of investment options, including individual stocks and a wider selection of mutual funds and ETFs.

Empower Dynamic Retirement Manager

One of Empower’s standout features is their proprietary Dynamic Retirement Manager. This investment methodology helps participants allocate their investments based on their unique risk tolerance and retirement goals.

It uses sophisticated algorithms to adjust investment allocations over time, aiming to optimize returns while managing risk.

Empower Retirement delivers on this front with a comprehensive online platform and mobile app.

Online Dashboard

Empower’s web-based platform serves as a central hub for managing your retirement account. Key features include:

Real-Time Account Balances: View your current account balance and track changes over time.
Investment Performance Tracking: Monitor the performance of your investments and make adjustments as needed.
Retirement Income Calculators: Use interactive tools to estimate your retirement income and adjust your savings strategy accordingly.
Educational Resources: Access a wealth of articles, videos, and webinars on various retirement planning topics.

Mobile App

Empower’s mobile app brings the power of their online platform to your smartphone. With the app, you can:

Check Account Balances: View your current balance and recent account activity on the go.
Make Investment Changes: Adjust your investment allocations or contribution rates from anywhere.
Use Planning Tools: Access retirement calculators and other planning tools while on the move.
Receive Notifications: Get alerts about important account activities or market events.

Fees and Pricing

Understanding the fee structure of any retirement plan provider is crucial, as fees can significantly impact your long-term savings. Empower Retirement’s fee structure can vary depending on the specific plan and services provided.

Empower’s fees typically include:

Investment Management Fees: These are charged by the underlying mutual funds or ETFs in your portfolio.
Administrative Fees: These cover the costs of recordkeeping, compliance, and other administrative services.
Advisory Fees: If you use Empower’s advisory services, there may be additional fees.

Keep in mind that some users have reported concerns about fee transparency and higher-than-average costs with Empower. Always review your plan’s fee disclosure carefully and compare it with industry benchmarks.

Even small differences in fees can have a substantial impact on your retirement savings over time.

Customer Service and Support

Effective customer support is crucial when dealing with something as important as your retirement savings. Empower Retirement offers many channels for customer support:

Phone Support: For urgent questions or complex issues, Empower provides phone support during business hours.
Email Assistance: For less time-sensitive inquiries, you can reach out via email.
Live Chat: Quick questions can often be resolved through Empower’s live chat feature on their website.
In-Person Consultations: Some plans offer the option for in-person consultations with financial advisors.

Empower has generally received above-average ratings in customer satisfaction studies. However, as with any large company, individual experiences can vary.

Some users report long wait times during peak periods or difficulty resolving complex issues.

Educational Resources

One area where Empower Retirement sets itself apart is in it’s commitment to financial education. They offer a wealth of resources to help participants make informed decisions about their retirement savings:

Webinars: Empower hosts regular webinars on various retirement planning topics, from basic savings strategies to advanced investment concepts.
Articles and Guides: Their website features a extensive library of articles covering a wide range of retirement and financial planning topics.
Interactive Tools: In addition to retirement calculators, Empower offers other interactive tools to help visualize retirement goals and track progress.
Retirement Readiness Assessments: These assessments help participants understand their current retirement preparedness and identify areas for improvement.
Financial Wellness Programs: Many Empower plans include comprehensive financial wellness programs that go beyond retirement planning to address overall financial health.

Strengths of Empower Retirement

Comprehensive Plan Offerings: Empower’s wide range of retirement plan options caters to diverse needs and employment situations.
Robust Digital Tools: Their online platform and mobile app provide powerful tools for managing retirement savings.
Strong Educational Resources: Empower’s commitment to financial education helps participants make informed decisions.
Proprietary Investment Solutions: The Dynamic Retirement Manager offers a sophisticated approach to investment allocation.
Scale and Stability: As one of the largest retirement services providers, Empower offers the benefits of scale and financial stability.

Potential Drawbacks

Fee Transparency: Some users report concerns about fee transparency and potentially higher-than-average costs.
Customer Service Variability: While generally well-regarded, some users report inconsistent customer service experiences.
Complexity: The wide range of options and features can be overwhelming for some users, particularly those new to retirement planning.
Limited Options for Non-Traditional Workers: While Empower offers solutions for traditional employment situations, options for gig economy workers or freelancers may be more limited.

Is Empower Retirement Right for You?

Choosing a retirement services provider is a significant decision that depends on your individual circumstances, employment situation, and retirement goals. Empower Retirement offers a comprehensive suite of services backed by significant industry experience and scale.

Empower may be a good fit if you:

Value a wide range of retirement plan options
Appreciate robust digital tools and resources
Want access to comprehensive educational materials
Are comfortable with a large, established provider

However, Empower might not be the best choice if you:

Prioritize the lowest possible fees above all else
Prefer a more personalized, boutique experience
Are a gig economy worker or freelancer looking for specialized solutions

Conclusion

Empower Retirement has established itself as a major player in the retirement services industry, offering a comprehensive range of plans, investment options, and digital tools. Their commitment to financial education and innovative features like the Dynamic Retirement Manager set them apart from many competitors.

However, like any financial service provider, Empower has it’s strengths and potential drawbacks. Careful consideration of your specific needs, a thorough review of fees, and comparison with other providers are essential steps in determining if Empower is the right fit for your retirement planning needs.

Remember, the most important aspect of retirement planning is taking action. Whether you choose Empower or another provider, the key is to start saving and planning for your future today.

Key Takeaways

Empower Retirement offers a wide range of retirement plans suitable for various employment situations.
Their investment options include target date funds, mutual funds, ETFs, and a proprietary allocation tool.
Empower provides robust digital tools, including an online dashboard and mobile app.
While fees can vary, some users report concerns about transparency and higher-than-average costs.
Empower’s educational resources are a standout feature, offering comprehensive materials for financial literacy.

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