Empower Retirement 401k review for 2022: advisory services fees, choosing investments, changing current allocations, rebalancing, cons and pros.


Empower Retirement Overview

Empower Retirement provides management services for employee-sponsored retirement plans. Accounts allow individual employees to view their retirement plans and manage their investments. Although the interface is not user friendly for a beginner it does allow the experienced account holder useful tools to control their investments. Empower Retirement is owned by Great-West Lifeco. Investment options offered to Empower Retirement participants include funds managed by Great-West.

Accessing Account Information

Some aspects of an Empower Retirement account are intuitive and easy to use. When first logging on the user can immediately see their account balance and yearly rate of return. Empower provides an Account Overview with high-level information that is easy to visualize and understand. The account holder can see their balances and allocations at a glance.

Empower Retirement review

But try to dig deeper into the account to understand the performance of investments, the participant’s contributions or fees and Empower becomes difficult to navigate. Past performance of individual investments is buried within menus. The participant can view their contributions or balance over a specified period but which contributions came from the employee and which came from the employer are not identified. Through the Empower Retirement website it is difficult to get an overall view of the fees or gross expense ratio of the current portfolio. The user will need to dig through and calculate these values themselves.

Choosing Future Investments

When deciding how to allocate future investments or shift the risk of an existing portfolio the account holder will want to compare multiple investments at once examining the asset type, the historical rate of return, the fee structure, etc. But this can be cumbersome to do in an Empower Retirement account because information about each available fund needs to be downloaded or viewed in an individual PDF. Then the user needs to sort through each file to find the information they are looking for.

There is an option to compare multiple investments’ value on a single graph, which gives a basic visual comparison. But comparing the details of investments side by side will still require some digging.

Empower Retirement review

Transactions, Changing Current Allocations or Rebalancing

With Empower, the account holder has control of their assets, within the limitations of their employer’s plan. The website’s menus are not intuitive but once the key tools are located they are easy to use. Current or future allocations can be modified.

Empower Retirement has a useful option to set up an account to rebalance quarterly, semi-annually or annually. The account owner can also log on and rebalance their account as often as they would like. The periodic rebalancing feature would be useful to users who prefer to be more hands-off with their approach to retirement investing.

Another useful option offered by is Dollar Cost Averaging. With Empower, an automatic dollar cost averaging plan can be set up for any sum over $100. The user can specify the rate and length of time across which to spread the investments. This is a common tactic for anyone who needs to reallocate or rollover a large sum buts wants to avoid the risk that comes with investing it all at once. Instead, the risk is lowered because the account will gradually invest in the new allocation over a longer period until all the money is moved.

Tools and Calculators

Empower Retirement provides calculators to compare the outcomes of various scenarios for better retirement planning. The calculators answer various “what-if” scenarios common to retirement account holders such as, “What will the penalty be if I start withdrawals early?” or “How much can I expect to have at the time I retire?”. But these tools do not allow the user to project a change in income or savings rate. In most cases the assumptions used for analysis are hidden from the user.

There are some other basic questions that Empower Retirement does not provide answers for. Someone making retirement contributions might have questions like, “If I increase my contribution, how much sooner can I retire?” “What will happen to my growth if I decrease my contributions?” Users will be better off looking elsewhere for online tools or doing their own calculations if they want more control of the inputs.

Advisory Services

Advised Assets Group, LLC (owned by Great-West Financial) offers three levels of services for Empower Retirement account holders: Managed Accounts, Advice and Guidance. The Managed Accounts have an annual fee of 0.65% for the first $100,000 balance and a decreasing fee structure for balances above that. With the Managed Account option the account is actively adjusted by an advisor based on the participant’s retirement goals and financial situation. The Advice level of service has an annual fee of $25 and an advisor performs a one-time adjustment to the account. The Guidance level of service is offered to all participants with no fee and provides a one-time asset allocation suggestion.

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Customer Service

Participants can call or email Empower Retirement with questions or concerns regarding their account. Customer Service representatives can help clarify policies laid out in the plan and help with rollovers. Representatives are upfront about what they cannot help with: they cannot offer any financial or legal advice.

Empower Retirement Pros

  • Features such as Dollar Cost Averaging and Automatic Rebalancing
  • Straightforward, no-frills usability
  • Retirement planning tools that offer simplified results

Empower Retirement Cons

  • Tedious to compare investment options
  • Cumbersome interface that can be difficult to navigate
  • Bias towards Great-West investments
  • Participants will need further research to model more complex financial scenarios

Empower 401k Review Summary

There are certainly more user friendly 401k management services out there. Empower Retirement does give the account holder the control they need with some helpful features like automatic rebalancing and dollar cost averaging. But the plan participant does need to be sure of what they are doing and where to find it on the Empower website first.

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