After doing my first free Empower monetary skilled assessment again in 2014, I made a decision to do one other funding portfolio assessment with them. Given the portfolio assessment is free for anybody with over $100,000 in investable property, and my monetary scenario has modified so dramatically since then, I figured, why not spend a little bit time uncovering potential optimization alternatives?
I additionally needed to expertise the method firsthand once more, in case any of you need to benefit from their free monetary assessment as properly. Total, I discovered it to be a worthwhile and academic expertise. You possibly can enroll right here if as soon as you’ve got opened up a free account and linked your property.
For background, I have been utilizing Empower’s free wealth administration instruments for the reason that finish of 2012. I even consulted with them part-time of their San Francisco workplace in 2013 and 2014. Lastly, Monetary Samurai is a long-time affiliate companion.
Empower’s Free Skilled Evaluation of My Retirement Portfolio
When you join a free Empower account and hyperlink at the very least $100,000 in investable property, you may schedule a free monetary assessment. The method contains two calls – a brief discovery name, adopted by a suggestions name.
The First Name: A 17-Minute Discovery Chat
After scheduling my appointment, an Empower skilled known as to confirm my id and achieve a fundamental understanding of my monetary scenario, objectives, and needs. Notice: you have to have linked at the very least $100,000 in investable property to qualify for the decision.
The dialog lasted about 17 minutes. I instructed him my age (48), my plan to begin withdrawing from my rollover IRA after 60, and my purpose of sustaining a cushty retirement with about $60,000 a yr in gross revenue/withdrawals, supplemented by Social Safety.
I didn’t inform the Empower skilled that I run Monetary Samurai or that I’m a private finance junkie. This fashion, issues have been extra reasonable for retirement to assist extra folks.
For the aim of the assessment, I solely shared my rollover IRA with about $1.5 million. This was my 401(ok) that I maxed out from 1999 to 2012 earlier than leaving my job. I transformed it to have extra flexibility in my investments and scale back charges. Because the conversion, I haven’t contributed a single greenback.
I used to be curious to listen to whether or not their suggestions have been just like how I make investments my general public funding portfolio.
The Second Name: A 40-Minute Advice Session
Per week later, we had the follow-up cellphone name. I logged into my Empower dashboard the place I linked my IRA so he may stroll me by way of his suggestions through slides. No video or in-person assembly was wanted, which was handy.
Based mostly on my $1.5 million in property, he launched Empower’s Personal Shopper service, for individuals who have a minimal of $1 million in investable property. As a Personal Shopper, you get two devoted advisors, precedence entry to their Funding Committee, retirement and wealth planning specialists, and even personal fairness funding choices.
My Rollover IRA’s Present Asset Allocation
The subsequent slide broke down my IRA allocation. I discovered that 99.6% of my holdings are in U.S. property, full home-country bias. About 97.5% is in U.S. shares, with the remaining in money, alternate options, worldwide shares, and bonds. I believed I used to be 99.9% in shares.
Sector-wise:
- 34.4% in Communication Providers (Google, Meta, Netflix)
- 35.2% in Tech (largely Apple)
- 12.2% in Client Discretionary
- 5.5% in Financials
- 3.9% in Well being Care
- 3.7% in Industrials
- 2.1% in Client Staples
In my thoughts, I simply lump Google, Meta, and Netflix into “Tech,” however technically they’re Communication Providers. So, my IRA is roughly 70% tech-heavy, a focus I’m comfy with given my outlook.
Private Technique Allocation Really helpful By Empower
Empower advisable a portfolio of:
- 75.6% Shares
- 10.1% Options
- 13.6% Bonds
Inside shares:
- 69.9% U.S.
- 21.8% Developed Worldwide
- 8.3% Rising Markets
Though I labored in worldwide equities for 13 years, I’ve averted them for years because of company governance issues and political dangers. Aside from Taiwan Semiconductor (Ticker: TSM), I’ve stayed U.S.-focused. Fortuitously, that labored out properly. U.S. shares have outperformed for over a decade (although 2025 has been a uncommon yr of worldwide outperformance).
Inside Options, about 64% was in actual property (together with overseas actual property), which caught my eye since ~40% of my general internet value is already in actual property. I didn’t ask which overseas markets they meant. Price asking if you happen to take the assessment.
A 20.9% gold allocation would’ve been good, given gold’s document 2025 efficiency.
At solely 13.6%, the bond allocation appeared mild for somebody retiring in 12 years. Nonetheless, if you happen to view actual property as bonds-plus sort of funding, the general portfolio roughly resembles a 75/25 shares/bonds combine, which feels proper for somebody in my place. That’s about my allocation in my taxable accounts too, so Empower’s suggestion made sense.
Good Weighting: Empower’s Core Technique
Empower’s Good Weighting technique has been round since my consulting days there. It’s their proprietary technique of establishing portfolios by evenly weighting throughout fashion, measurement, and sector, as a substitute of following a market-cap index dominated by the largest names.
The thought: diversify away from bubbles and scale back focus threat. You find yourself with a extra balanced portfolio that doesn’t lean too closely on a single sector like tech.
Good Weighting is a rational, disciplined method. Nonetheless, I’m primarily based in San Francisco and am a sturdy believer in tech, so I’m advantageous staying obese. Nonetheless, if this have been my solely portfolio at age 48, having 70% in a single sector could be thought-about extreme.
For example, my IRA fell from $1,115,000 to $827,000 in 2022, a 26% drop. That’s almost 5 years of residing bills gone in a single yr, if my $60,000 annual residing bills are true. If the exuberance of 1999 is actually again, my tech-heavy portfolio may simply lose 40% of its worth throughout the subsequent bear market.
Subsequently, getting an expert assessment of your investments could be extra necessary than ever.
Good Weighting Might Outperform The S&P 500 Throughout Tough Instances
This beneath chart tries to emphasise how Good Weighting outperformed the S&P 500 throughout two tough time spans (12/31/1999 – 12/31/04 and 12/31/07 to 12/31/12). Nonetheless, in a raging bull market, Good Weighting would underperform given Empower would promote your winners with a view to preserve their goal weightings.
The nearer you’re to conventional retirement and the extra cautious you’re in regards to the inventory market, the extra Good Weighting is smart. Personally, I believe the superb return state of affairs in retirement is gradual and regular returns. I don’t wish to see greater than a ten% downward swing in my internet value in a yr, which is why my internet value is so diversified.
In your name with the Empower skilled, ask:
- What’s the drift threshold (%) per sector / fashion / measurement that triggers a rebalancing commerce in Good Weighting?
- How do you steadiness tax penalties vs. drift correction (particularly in taxable accounts)?
- Is there a grace band or “buffer zone” to forestall fixed churning?
Holistic Monetary Planning
In fact, for most individuals, a retirement portfolio like an IRA is only one piece of the monetary puzzle. Neither is optimizing it the one purpose. The slide beneath exhibits how Empower may help with broader financial savings and withdrawal methods, an space even essentially the most disciplined FIRE fans typically battle with. Having skilled steerage right here could make a significant distinction.
Figuring out how a lot to save lots of to your kids’s training is one other large problem, particularly given the relentless rise in faculty prices and the unsure affect of AI on future careers. I’ve explored this intimately in my publish on 529 plan financial savings quantities by age and whether or not or to not superfund the 529.
For these working in tech with a big portion of compensation tied to inventory choices, consulting with an advisor on tax-efficient promoting methods might be invaluable. Correct timing and diversification may help scale back tax drag and decrease general portfolio threat.
Property Planning Is Necessary However Usually Uncared for
Lastly, property and legacy planning stands out as the most missed but important space of monetary administration. Most of us don’t like considering too far forward, not to mention considering our personal mortality. However having an property planning specialist stroll you thru completely different eventualities may help you decrease property taxes and guarantee your wealth is distributed as supposed.
In the event you’re lucky sufficient to die with an property value greater than the federal property tax threshold (set to return to round $15 million per individual in 2026), you’ll need to plan fastidiously to cut back the 40% property tax on each greenback above that restrict. A technique is thru an irrevocable life insurance coverage belief.
Having the ability to discuss to an Empower property planning skilled as a part of its service is a giant worth add.
A Retirement Forecast
Lastly, we wrapped up the decision by reviewing what my retirement may appear like beginning at age 60, simply 12 years from now, if I adopted Empower’s suggestions. You possibly can mannequin related eventualities your self utilizing their free wealth administration instruments by adjusting your individual enter assumptions.
Basically, you need to goal at the very least a 90% chance that your portfolio will help your retirement objectives. Ideally, you purpose for 99% to construct in an additional cushion for surprising occasions or lower-than-expected returns.
Based mostly on my assumptions – spending $60,000 a yr, receiving $37,416 yearly in Social Safety, and having ~$1,500,000 in my IRA invested per Empower’s suggestions – I’m comfortably on observe.
Actually, if I dwell to age 92, the projection exhibits I’d move away with almost $4 million left over. This outcome, ending up wealthier in dying than at retirement, is definitely fairly widespread when following the 4% protected withdrawal rule.
That’s why, when you formally retire, it’s properly value conducting an in depth monetary evaluation of your scenario and operating a number of withdrawal charge eventualities. Doing so may help make sure you strike the best steadiness between residing properly in the present day and never operating out of cash tomorrow.
A Extra Luxurious Retirement Assumption
Given I don’t need to die with a internet value 2.5X increased than after I retired, I made a decision to bump up my annual spending from $60,000 to $96,000 and YOLO a little bit. Even at that degree, $96,000 nonetheless represents only a 4% protected withdrawal charge if I retire at 60 with a $2.35 million portfolio.
In different phrases, I’d nonetheless be projected to die with round $2.4 million left over. That is loads of cushion to sleep properly at night time whereas having fun with life extra alongside the best way. That mentioned, my chance of this retirement state of affairs coming to fruition is just 81%. So possibly I “solely” die with $1-$2 million as a substitute of $2.4 million. That is advantageous by me.
The Course of Of Hiring Empower
Total, I believed the 40-minute free monetary session was worthwhile for understanding the place my IRA portfolio stood. It feels nice understanding that if I could make it to age 60, I shouldn’t have any drawback spending at the very least $96,000 a yr from my IRA portfolio alone. The projection assumes I rebalance my present extremely aggressive portfolio, however since I’ve been semi-retired since 2012, I’m not too nervous.
Empower makes use of BNY Pershing as its custodian, so if you happen to determine to have them handle your cash, you’ll merely fill out a switch type and transfer your present property to Pershing. Having transferred over $1 million portfolios earlier than to get a greater mortgage charge, I do know the method is simple. You simply fill out a permission type on-line and it takes at most two weeks.
Capital Beneficial properties Taxes Due To Rebalancing
My major concern was the tax hit from rebalancing. Paying capital positive factors on roughly $1.2 million of a $1.5 million portfolio would sting. Fortunately, the Empower advisor jogged my memory that as a result of this was my IRA, there are no tax penalties from shopping for or promoting positions inside it.
Subsequently, in case you are contemplating hiring Empower, I like to recommend beginning along with your tax-advantaged accounts. Alternatively, you can have them handle a smaller taxable brokerage account, ideally near the $100,000 minimal. This method helps decrease your tax liabilities.
Empower Administration Charges
Empower’s charges are aggressive for a full-service wealth administration agency.
- 0.89% AUM for funding or wealth administration purchasers with lower than $1 million
- Personal Shoppers:
- 0.79% on the primary $3 million
- 0.69% on the subsequent $2 million
- 0.59% on the subsequent $5 million
- 0.49% on property over $10 million
Whereas no one enjoys paying administration charges, these charges are decrease than large names like Goldman Sachs or JP Morgan, which usually cost over 1%, on high of the charges from the funds they make investments your capital in.
I do know this firsthand as a result of I assist handle a detailed relative’s account free of charge. She moved her seven-figure portfolio from Goldman to an internet brokerage account for me to handle. She was paying over 1% however was sad with their service and likewise needed to half methods together with her ex-husband’s cash administration agency.
Who Advantages Most From a Monetary Advisor
In the event you don’t like managing your portfolio, aren’t assured in investing, do not have the time, and wish holistic monetary steerage, Empower is value contemplating. You possibly can attempt them for a yr, be taught from their method, after which determine whether or not to proceed paying or return to managing your cash your self.
Many traders have missed out on large positive factors this cycle as a result of they saved an excessive amount of in money, paralyzed by indecision. I’ve met a lot of them and have been at all times shocked to see how a lot money they’d relative to their internet value. Hiring a disciplined advisor may’ve helped them steadily make investments and construct wealth.
On the flip facet, some traders are too aggressive, buying and selling too typically, promoting close to the underside, and leveraging close to the highest. These of us may additionally profit from Empower’s structured, unemotional method to portfolio administration.
For these of us who’re private finance fanatics, we are able to handle our personal cash simply advantageous. But it surely’s nonetheless sensible to get an expert check-up yearly or two to make sure we’re on observe. Markets change, threat tolerances evolve, and it’s simple to lose perspective throughout bull and bear cycles alike.
A free Empower monetary session is a low-effort method to get that second opinion, and possibly uncover a couple of methods to optimize your wealth alongside the best way.
Grateful For My Free Monetary Evaluation
Even after a long time of managing my very own cash, I discovered worth in getting a recent, skilled perspective. Empower’s free monetary assessment gave me larger readability about my retirement plan and confidence that my present technique nonetheless aligns with my long-term objectives. Generally, an out of doors set of eyes helps you see what you’ve been overlooking.
It’s humorous to suppose again: after I began Monetary Samurai at 32, conventional retirement at 60 or 65 felt like a lifetime away. Now at 48, it all of a sudden feels proper across the nook.
My power isn’t what it was once, however my duties have solely grown with two younger youngsters and a stay-at-home spouse relying on me. The stress to get our funds proper has by no means been larger. That’s why I’m grateful I went by way of one other free monetary assessment with Empower. It gave me peace of thoughts and I hope it does the identical for you.
Readers, if you happen to’ve had your individual free monetary assessment, what are some belongings you found about your portfolio and your general funds? When was the final time you had a assessment of your funds and what did you alter because of this?
The assertion is offered to you by Monetary Samurai (“Promoter”) who has entered right into a written referral settlement with Empower Advisory Group, LLC (“EAG”). Click on right here to be taught extra.
