Imagine retiring and not having any responsibility other than cashing a monthly check from your investments. That’s true retirement! No job, no schedule, and no managing your investments.
Back in the old days—like 10 years ago—you had to pay a human investment advisor anywhere between 1% and 2% of your portfolio value each year to provide that service. But now, you can get the same investment management for about 0.25% per year, or even lower.
That management comes from robo-advisors. They’ll provide professional, automated investment management, including portfolio design, security selection, regular rebalancing, dividend reinvesting, and even tax minimization strategies on taxable accounts.
For those who want a true retirement, we’ve prepared this list of the eight best robo-advisors for retirees. Each provides its own unique service level. Choose the one that best matches your investment needs and preferences, and you’ll be on your way to that worry-free retirement you’ve always dreamed of.
Best for: Retirees with larger portfolios who want comprehensive wealth management with access to financial advisors.
Why Personal Capital is a good robo-advisor for retirees: Personal Capital takes top honors on our list because they can manage multiple accounts, freeing you from the job of managing your investments across the board. In addition, you’ll have access to certified financial planners—and even a dedicated CFP with a minimum account balance of $200,000. That will give you the best of automated investment management and live, human-guided investment advice. Personal Capital has a higher fee structure that any of the robo-advisors on this list, but that’s because they also offer a higher level of personal service.
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Best for: Retirees who prefer investing in Vanguard funds.
Why Vanguard Digital Advisor is a good robo-advisor for retirees: When you invest with Vanguard, you’ll be investing with the world’s largest source of mutual funds, and the second largest provider of ETFs. What’s more, Vanguard funds are so popular—due to their low expense ratios—they are commonly included in the portfolios of other robo-advisors as well as traditional, human-guided investment advisors.
That’s the key to Vanguard Digital Advisor. Your account will be professionally managed, with one of the lowest fees in the industry, and composed of low-cost Vanguard funds. This is a new robo-advisor, but that’s hardly a problem when it’s part of the Vanguard family. As a retiree, you can use Vanguard Digital Advisor to manage both taxable investment accounts and your retirement accounts.
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Best for: No-fee investment management.
Why SoFi Automated Investing is a good robo-advisor for retirees: SoFi Automated Investing will manage your investments—both taxable and retirement accounts—with no advisory fee. You’ll also have access to financial advisors at no additional cost. And if you want to start small, you can open an account with no money at all. And if you want to participate in self-directed investing along with a managed account, you can do so through SoFi Active Investing, which also enables you to hold cryptocurrencies. The platform also offers plenty of other personal financial services, including student loan refinances, mortgages, and personal loans.
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Best for: Retirees who want a no-fee robo-advisor with the option to engage in self-directed trading on one of the best brokerage platforms in the industry.
Why Charles Schwab Intelligent Portfolios is a good robo-advisor for retirees: Charles Schwab is the largest retail investment broker in the world, and obviously a popular choice with investors. That means you can have part of your portfolio professionally managed through Charles Schwab Intelligent Portfolios, while participating in active investing through a Charles Schwab brokerage account. Even better, Charles Schwab Intelligent Portfolios provides investment management at no fee, and invests your money in more asset classes than other robo-advisors. They also offer the Charles Schwab Intelligent Portfolios Premium version that charges an advisory fee, but offers access to financial advisors.
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Best for: Retirees who want automated investment management with the option to engage in self-directed trading on one of the best brokerage platforms in the industry.
Why Fidelity Go is a good robo-advisor for retirees: Fidelity is the second largest retail brokerage in the world, so it’s not surprising it offers options similar to Charles Schwab. You can participate in self-directed investing through a Fidelity brokerage account, while having part of your portfolio managed through the Fidelity Go robo-advisor.
Compared to Charles Schwab Intelligent Portfolios, Fidelity Go loses a few points because it has an advisory fee on accounts of $10,000 or more. But it likely makes up for this by investing your money in Fidelity Flex Funds. That’s a mix of active and passively managed funds with no expense ratios. That will increase your net investment returns, and at least partially offset the advisory fee.
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Best for: Retirees who want comprehensive financial management with broader diversification, including high-interest savings and no-fee checking.
Why Wealthfront is a good robo-advisor for retirees: Wealthfront and Betterment are the two largest independent robo-advisors, so it’s hardly surprising their products and service levels closely match one another. But there are two important areas where Wealthfront outdoes Betterment. The first is inclusion of alternative investments in your portfolio, like real estate and natural resources for greater diversification. The second is more aggressive tax-loss harvesting strategies on larger accounts.
Most robo-advisors use tax-loss harvesting to minimize the tax liability generated in taxable investment accounts. It works by selling positions in declining asset classes, creating losses that will reduce the gains on winning classes. Wealthfront beats the competition in this category by including individual stocks on larger, taxable accounts. The use of individual stocks makes it possible to take advantage of more aggressive income tax reduction strategies.
Best for: Retirees who want comprehensive financial management, including high-interest savings and no-fee checking.
Why Betterment is a good robo-advisor for retirees: Betterment works similarly to Wealthfront. It has the advantage of having no minimum initial investment requirement, plus access to financial advisors on larger account balances. But it’s not quite as aggressive with tax-loss harvesting on taxable brokerage accounts as Wealthfront is. But it also offers a cash account with a current yield of 0.40% APR, which is many times higher than what’s currently being paid on accounts at banks and credit unions.
Best for: Retirees who prefer to choose their own investments.
Why M1 Finance Expert Pies is a good robo-advisor for retirees: If you like the idea of having your investment portfolio professionally managed, but you prefer to choose your own investments, then M1 Finance Expert Pies is the right robo-advisor for you. And while that’s an unusual combination in the robo-advisor universe, they also provide this service completely free of charge.
M1 Finance Expert Pies uses a highly unique investment methodology. You’ll invest your money, using a method known as “pies.” Each pie requires a minimum investment of $100 and can be packed with up to 100 ETFs and individual stocks. Once created, each pie will be managed through the M1 robo-advisor, free of charge. You can create an unlimited number of pies in your account. And if you prefer, M1 finance offers at least 83 pre-built pies, sparing you the task of creating them for yourself. It’s the best mix of self-directed investing and automated management there is.
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If you’re a retiree, you may also want to retire from investment management. If that’s the case, take advantage of one of these eight robo-advisors. Any one of them will be suitable for retirees. It’ll just be a matter of choosing the one (or ones) that will work best for your own investment needs and preferences.