Is empower retirement a good company 3-star brokerage rating

Empower Retirement Review: Is It Good?

2023 Empower Retirement IRA review: 401K plans, Roth, rollover and traditional IRAs. Is Empower Retirement a good company? Account rating, plan funds management fees, cons and pros, and cost.

Empower Review

I use Empower for my Employer-Sponsored 401k. This platform was originally owned by Prudential and its website application is still run by Prudential. For the majority of my review, I will be focusing on the mobile application which was created by Empower.

Empower Cost

Empower’s expense ratios range from 0.25% to 0.75% for the various funds you can invest in with their 401k. This is higher than I would like, considering passive index funds on Chase or TD Ameritrade are in the 0.03% to 0.10% range, and index funds tend to outperform most other funds.

Empower Interface

When you open the App, you are brought to an overview of all the accounts you have with Empower. I only have my 401-K through Empower, but it is convenient to be able to view all your plans in the same place.

It combines the total value of your accounts as well as displays your year-to-date performance. The homepage is not as information-rich as other brokerages and has a bland display.

Typically, you will see the performance of the major indexes and commodities being viewable as a user. There is also not a display of any market or company-specific news.

Other platforms have a research tab that would include articles related to earnings calls or recent announcements. I think this is a major negative of the app, because I will always be going to another platform to be able to find out more details.

The website also does not offer anything related to a deep dive into a company or sector.

Empower Retirement Reviews

Empower Account Details

The Account Details page has 4 sub-tabs within it (Overview, Contribution, Investments, and Loans). The Overview page displays more information about my 401k than the home page did. I can view my vested amount as a percentage of the total.

I can adjust the dates of my portfolio’s performance to more specific periods than year to date. I can view my contribution percentage from my paycheck, and I have the option from the app to adjust this. I find this helpful since my other option would be digging through my employer’s homepage, and it would take a lot longer.

Scrolling down further, I can see what percentage of the total account balance came from my contributions, my employer’s contribution, and previous 401k that was rolled over. It also has a display of when and how much I have contributed over the past 30 days.

The app also offers a Learn More feature about what happens to my balance if I switch jobs. The link explained my current vested balance and how long I must stay with my company to become fully vested.

The Contributions tab does not offer much extra information, I do not know why they have it. I can view and do everything that is offered here from the Overview page on the Account Details.

Empower Investments Options

The Investment tabs are where I can see the breakdown of how my money is invested. Empower offers me the option to have an already diversified portfolio.

I took a quiz that asked questions about my investment horizon, my level of risk appetite, and how I would be looking to use the account. Since I am 29 years old, I opted for a long-time horizon with medium risk.

Empower Mutual Funds

After I completed the quiz, Empower designed a portfolio based on my answers. It diversified my portfolio into various funds with different purposes to achieve balance. Among them are large-cap growth, small-cap growth, an international fund, a bond fund, and a stable value fund.

From the Investment page, I can adjust my holding percentages easily by clicking Adjust Investments. When you click that, you are given three additional options. The first one is Allocating Your Investments, which allows you to change your future contributions. The interface is very intuitive, you can see you are at 100% allocation at the top and by clicking plus and minus symbols you can reallocate as you see fit.

The second option opens the Empower Goalmaker. The Goalmaker displays my strategy which is moderate and displays years to retirement at 42. The Goalmaker also allows you to view other investment types with similar risk profiles. You are given a list of other funds, but I do not like how little information is available about them on the app.

In Empower when you click on a fund you are given a display of the performance in the prior month's quarter and 1-10 years. These are all displayed at the same time, which is confusing and looks bad in my opinion.

You can view the expense ratio and the price from this page. To find out anything else, you have to open another page called the Fund Fact Sheet.

Empower Mutual Fund

This pulls you away from the app to a prudential pdf. The pdf provides a description and objective for the fund as well as the index that it is tracking.

There is a volatility ranking provided by Morningstar as well as the top 5 holdings of the fund and their respective percentages.

One downside is you cannot view the holdings of the entire fund. There is a breakdown of the holdings by non-US stock, US stock cash, and others as another form of analysis. Other information included is the p/e ratio, price to book, and 3 years of earnings growth. There are a variety of other financial metrics left out on this report that would be visible from other brokerages.

One major con is the lack of comparison I can make. On other platforms, I can view similar funds and have all their information visible at once. For this app, I would have to open several tabs or transfer the information manually to an Excel document, I think this is a major downside for analysis.

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Empower Loans

The last tab on the Account Details page is for Loans. When clicking this, you are prompted to explore loans with Empower. These loans are taken out against your 401-K.

There is an initiation fee of $50. You are permitted to have one loan at a time. There is a minimum amount of $1,000 for the loan.

The loan type is a general-purpose loan that must be paid back with after-tax dollars into the account.

One advantage of this loan option is that the loan will not be taxed if it is paid off in full on time.

There is a 4.75% rate with a maximum repayment term of 5 years.

Financial Wellness

The last useful area in the Empower app is the Financial Wellness tab. The first resource this offers is to Check Your Financial Help. The video helps anyone create a plan for their retirement goals by giving a tutorial on how to assess your portfolio.

Empower Retirement Reviews

The tab also includes a wide range of articles. There are savings recommendations, salary negotiation tactics, information on how to save money on filing your taxes, life insurance explanations, and much more.

I find this section of the app to be better than any similar learning sections on platforms like Fidelity or Seeking Alpha. All the articles are consolidated into under an 8-minute read. The wide variety of articles allows me to explore things I would not have thought to learn on my own.

Tips and Tricks

On the website, Empower offers a substantial tips and insights section. The main sections are Retirement Planning, Family Finances, Debt Management, Saving, and Investing.

Each section when clicked brings the user to a variety of articles and quizzes to provide a well-rounded approach to understanding that topic. I think this section of Empower is the strength of the website. It builds on what the mobile app has with the ability to learn important information quickly.

I read a few articles on debt management and utilized their debt payoff calculator. This allowed me to plug in my student loans and determine the best payback option.

I think the app has a niche area of information that can be helpful for a person knowing very little about personal finance. I think anyone more serious about analysis would become frustrated quickly with the platform.

Empower Retirement Review Summary

In conclusion, Empower is a high quality vendor of retirement services. They have an extensive network of funds, a rock-solid business model, and a user-friendly account management, along with a great customer support.

However, the main cause for concern is that many of its funds have much higher management fees than competitor funds which investors can buy on their own at many discount brokers, such as Chase or TD Ameritrade.

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Updated on 8/25/2022.