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Voya Financial Review: 401K Plan, IRA Fees, and Retirement Account Pricing for 2021

Voya: How "My Orange" Measures Up

Rebranding an entire company is difficult, so it was a big deal when ING U.S. Inc started its millennial-focused spinoff company Voya in 2013, and begun the process of phasing out the ING name altogether in 2014.

Like other financial behemoths, Voya offers a wide variety of financial services including employee retirement and life insurance benefits, individual retirement and investments, and professional investment and wealth management. With their popular Orange Money commercial campaign, featuring Vern the rabbit and Val the squirrel, Voya aims to be the lighthearted yet trustworthy retirement partner of choice for Gen X’ers and Millennial. But does Voya really have anything more to offer its customers than their competitors?

Voya’s Colorful First Impression

One of the most refreshing features of Voya is that their home screen not only shows the user’s Voya account balance, but also includes their overall investment balance from other accounts that users can choose to link. Voya then uses that information to provide visuals that help users track where they’re at with their goals. Below is a screenshot of the homepage of a user with a Voya 401(k). The current balance at the top always shows the Voya-only balance, but the monthly retirement income projection includes projections from all of the user’s current investments. This is just one of Voya’s powerful visual tools for individual account management, and gives even the savviest financial planner a valuable way to stay up-to-date on their retirement plan.

Voya review

Voya Investment Options

Voya has no shortage of different types of financial accounts and services compared to their competition, but Voya members who have accounts through their employer will have some employer-specific limitations on which funds are made available to them as investment choices. Those who prefer a hands-off approach to investing will find a series of retirement funds for their Roth or traditional 401(k) with target retirement dates at five-year intervals from 2025 to 2055 with individual expense ratios ranging from 0.69% to 0.75%. It’s important to note that these ratios are on top of Voya’s account-level administrative fees.

Stock funds, bond funds, and short term investments are all available for those who prefer to create their own portfolio. While these options vary by employer as well, Voya has done well at creating a nice mix of index funds, growth and high yield funds, bonds, and funds with various levels of cap values. The list includes funds from other familiar names including Vanguard and T. Rowe Price. It’s no surprise that these have a wider range of expense ratios, starting at approximately 0.04% (a Vanguard index fund) up to 0.96% (for a mid-cap value fund from Artisan).

Almost all portfolio changes can be made online easily, including paycheck withholding preferences, fund transfers, and balance relocations. Online investors can expect to see the tools that they are used to seeing from other online brokers including retirement calculators, automatic withholding rate adjustment tools, a messaging center, online statements, and personal finance planning tools. While these tools might seem flashier than others at first glance, it’s important to remember that nearly all firms have these standard features available to their clients.

Voya 401K review

Voya Fees

Like most other investment management companies, Voya takes a flat administrative fee, which may vary depending on the account balance, account type, and/or employer profile. While Voya advertises on their website that they offer managed portfolio options have expenses ranging from 0.95%-2.00%, a quick calculation on one user’s quarterly statement showed an administrative fee of nearly 3.5%. Unfortunately, these fees are not stated outright anywhere in a user’s online account profile. Finding the administrative fee on a quarterly statement requires a manual calculation from currency into percentage, as well as the knowledge that “Other Debits” includes the administrative fees.

Voya Fees

"Distribution/Other" is a catch-all term that includes Voya's professional management fees. These fees are listed on a user’s statement by dollar amount by fund, which makes calculating the overall fees a challenge for the average investor.

Other Voya fees, like distribution fees, loan fees, and check delivery fees, still apply; again, these are dependent upon the account type and/or employer profile. Fee transparency is not one of Voya’s strengths, especially when their competitors have financial statements that show much clearer summaries of the true administrative fees. With account holders demanding more honesty from their financial institutions than ever before, this is a change that Voya should be making in the near future in order to adhere to the customer-focus emphasis of their brand.


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Is Voya Worth the Extra Fees?

When compared to their most prominent competitors, Vanguard, Erade, and TD Ameritrade, Voya leaves much to be desired in terms of its lack of fee transparency and its lackluster list of fund options. Their in-house target retirement funds are more expensive with the same (or lesser) overall performance of Vanguard’s equivalent funds, with the only clear advantage over Vanguard being their online account’s ability to link to outside investment accounts. Voya’s financial planning and retirement tools might be flashier and more colorful, but for the average investor, it’s hard to justify the extra fees Voya charges for a few extra pixels.

On the flip side, there’s no need for the Voya member to switch instantly. It’s clear to see that Voya’s goal is to make investing extremely simple and accessible; the extra fees may be outweighed by an employer match or simply the tax benefits a person can reap by investing wisely. Plus, for someone considering Voya, one of the best features of a Voya individual account is that the minimum initial investment of $5,000 is waived for those who deposit at least $100 monthly. Although quarterly maintenance and/or online trade fees still apply, there’s good reason to believe that this feature gives Voya an advantage in recruiting their millennial targets. The ability to open an account without a lump sum, paired with continued pressure to lower fees to stay competitive, should be more than enough reason for new members to weigh Voya among their many other investment options. Opening a second brokerage account with top rated broker, such as TD Ameritrade, looks like the most reasonable and safe approach.