After doing my first free Empower monetary skilled evaluate again in 2013, I made a decision to do one other funding portfolio evaluate with them. Given the portfolio evaluate is free for anybody with over $100,000 in investable belongings, and my monetary state of affairs has modified so dramatically since then, I figured, why not spend a little bit time to uncover potential optimization alternatives?
I additionally wished to expertise the method firsthand once more, in case any of you wish to make the most of their free monetary evaluate as nicely. General, I discovered it to be a worthwhile and academic expertise. You possibly can join right here if as soon as you’ve got opened up a free account and linked your belongings.
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 once they had been nonetheless referred to as Private Capital. Lastly, Monetary Samurai is a long-time affiliate associate.
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 belongings, you may schedule a free monetary evaluate. 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 referred to as to confirm my identification and acquire a primary understanding of my monetary state of affairs, targets, and needs. Observe: you need to have linked at the very least $100,000 in investable belongings to qualify for the decision.
The dialog lasted about 17 minutes. I informed him my age (48), my plan to begin withdrawing from my rollover IRA after 60, and my aim of sustaining a snug retirement with about $60,000 a yr in gross earnings/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 manner, issues had been extra sensible for retirement to assist extra folks.
For the aim of the evaluate, 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 cut back charges. I haven’t contributed a greenback to it since.
I used to be curious to listen to whether or not their suggestions had been much like how I make investments my general public funding portfolio.
The Second Name: A 40-Minute Advice Session
Every week later, we had the follow-up cellphone name. I logged into my Empower dashboard so he may stroll me via his suggestions by way of slides. No video or in-person assembly was wanted, which was handy.
Primarily based on my $1.5 million in belongings, he launched Empower’s Personal Shopper service, for many who have a minimal of $1 million in investable belongings. As a Personal Shopper, you get two devoted advisors, precedence entry to their Funding Committee, retirement and wealth planning specialists, and even non-public fairness funding choices. Sounds fairly good.
My Rollover IRA’s Present Asset Allocation
The following slide broke down my IRA allocation. I discovered that 99.6% of my holdings are in U.S. belongings—proof of my home-country bias. About 97.5% is in U.S. shares, with the remainder in money, alternate options, worldwide shares, and bonds. I assumed I used to be 99.9% in equities.
Sector-wise:
- 34.4% in Communication Companies (Google, Meta, Netflix)
- 35.2% in Tech (principally 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 Companies. So, my IRA is roughly 70% tech-heavy, a focus I’m comfy with given my outlook.
Private Technique Allocation Beneficial 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 prevented them for years as a result of company governance considerations and political dangers. Apart from Taiwan Semiconductor (Ticker: TSM), I’ve stayed U.S.-focused. Happily, that’s labored out nicely. 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 web price is already in actual property. I didn’t ask which overseas markets they meant. Price asking in case you take the evaluate.
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. Nevertheless, in case you view actual property as bonds-plus kind 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 advice 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 setting up portfolios by evenly weighting throughout model, dimension, and sector, as a substitute of following a market-cap index dominated by the largest names.
The concept: diversify away from bubbles and cut back focus danger. 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. Nevertheless, I’m primarily based in San Francisco and am a sturdy believer in tech, so I’m wonderful staying obese. Nonetheless, if this had been your solely portfolio at age 48, having 70% in a single sector could be thought of extreme.
For example, my IRA fell from $1.115 million to $827,000 in 2022, a 26% drop. That’s practically 5 years of dwelling bills gone in a single yr, if my $60,000 annual dwelling bills true.
Good Weighting Could 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). Nevertheless, in a raging 1999-like bull market, Good Weighting would underperform given Empower would promote your winners with a purpose to keep their goal weightings.
The nearer you’re to conventional retirement and the extra cautious you’re concerning the inventory market, the extra Good Weighting is sensible. Personally, I feel the splendid 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 web price in a yr, which is why my web price is so diversified.
In your name with the Empower advisor, ask:
- What’s the drift threshold (%) per sector / model / dimension 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
After all, for most individuals, a retirement portfolio like an IRA is only one piece of the monetary puzzle. Neither is optimizing it the one aim. The slide beneath reveals how Empower can assist with broader financial savings and withdrawal methods, an space even probably the most disciplined FIRE fans typically battle with. Having skilled steerage right here could make a significant distinction.
Figuring out how a lot to avoid wasting in your kids’s training is one other massive problem, particularly given the relentless rise in faculty prices and the unsure impression 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 could be invaluable. Correct timing and diversification can assist cut back tax drag and decrease general portfolio danger.
Property Planning Is Necessary However Usually Uncared for
Lastly, property and legacy planning often is the most ignored but important space of monetary administration. Most of us don’t like pondering too far forward, not to mention considering our personal mortality. However having an property planning specialist stroll you thru totally different situations can assist you decrease property taxes and guarantee your wealth is distributed as meant.
Should you’re lucky sufficient to die with an property price greater than the federal property tax threshold (set to return to round $15 million per individual in 2026), you’ll wish to plan rigorously to cut back the 40% property tax on each greenback above that restrict. A method 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 seem like beginning at age 60, simply 12 years from now, if I adopted Empower’s suggestions. You possibly can mannequin related situations your self utilizing their free wealth administration instruments by adjusting your individual enter assumptions.
Basically, you wish to goal at the very least a 90% chance that your portfolio will help your retirement targets. Ideally, you intention for 99% to construct in an additional cushion for surprising occasions or lower-than-expected returns.
Primarily based on my assumptions – spending $60,000 a yr, receiving $37,416 yearly in Social Safety, and having $1,519,000 in my IRA invested per Empower’s suggestions – I’m comfortably on observe.
In truth, if I reside to age 92, the projection reveals I’d move away with practically $4 million left over. This outcome, ending up wealthier in demise than at retirement, is definitely fairly widespread when following the 4% protected withdrawal rule.
That’s why, when you formally retire, it’s nicely price conducting an in depth monetary evaluation of your state of affairs and working a number of withdrawal price situations. Doing so can assist make sure you strike the fitting steadiness between dwelling nicely right now and never working out of cash tomorrow.
Given I don’t wish to die with a web price 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 stage, $96,000 nonetheless represents only a 4% protected withdrawal price 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 nicely at night time whereas having fun with life extra alongside the best way.
The Course of Of Hiring Empower
General, I assumed 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 in case you resolve to have them handle your cash, you’ll merely fill out a switch type and transfer your current belongings to Pershing. Having transferred over $1 million portfolios earlier than to get a greater mortgage price, I do know the method is easy. You simply fill out a permission type on-line and it takes a number of days.
Capital Good points Taxes Due To Rebalancing
My principal concern was the tax hit from rebalancing. Paying capital beneficial properties 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.
Due to this fact, in case you are contemplating hiring Empower, I like to recommend beginning together with your tax advantaged accounts. Alternatively, you could possibly have them handle a smaller taxable brokerage account, ideally near the $100,000 minimal. This method helps decrease your tax liabilities. And in case your portfolio already follows a Good Weighting model diversification method much like Empower’s, the tax impression from rebalancing in your taxable portfolio could also be even decrease.
Empower Administration Charges
Empower’s charges are aggressive for a full-service wealth administration agency.
- 0.89% AUM for funding or wealth administration shoppers 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 belongings over $10 million
Whereas no one enjoys paying administration charges, these charges are decrease than massive names like Goldman Sachs or JP Morgan, which usually cost over 1%, on prime of the charges from the funds they make investments your capital in.
I do know this firsthand as a result of I assist handle an in depth relative’s account without spending a dime. She moved her seven-figure portfolio from Goldman to a web based brokerage account for me to handle. She was paying over 1% however was sad with their service and in addition wished to half methods together with her ex-husband’s cash administration agency.
Who Advantages Most From a Monetary Advisor
Should you don’t like managing your portfolio, aren’t assured in investing, do not have the time, and wish holistic monetary steerage, Empower is price contemplating. You possibly can attempt them for a yr, study from their method, after which resolve whether or not to proceed paying or return to managing your cash your self.
Many buyers have missed out on enormous beneficial properties 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 had been at all times shocked to see how a lot money they’d relative to their web price. Hiring a disciplined advisor may’ve helped them steadily make investments and construct wealth.
On the flip facet, some buyers 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 will handle our personal cash simply wonderful. But it surely’s nonetheless good to get knowledgeable check-up yearly or two to make sure we’re on observe. Markets change, danger tolerances evolve, and it’s straightforward to lose perspective throughout bull and bear cycles alike.
A free Empower monetary session is a low-effort option to get that second opinion, and possibly uncover a couple of methods to optimize your wealth alongside the best way.
Grateful For My Evaluation
Even after many years of managing my very own cash, I discovered worth in getting a recent, skilled perspective. Empower’s free monetary evaluate gave me higher readability about my retirement plan and confidence that my present technique nonetheless aligns with my long-term targets. Generally, an outdoor 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, however my obligations have solely grown with two younger children and a stay-at-home spouse relying on me. The stress to get our funds proper has by no means been higher. That’s why I’m grateful I went via one other free monetary evaluate with Empower. It gave me peace of thoughts and I hope it does the identical for you.
Readers, in case you’ve had your individual free monetary evaluate, what are some belongings you found about your portfolio and your general funds? When was the final time you had a evaluate of your funds and what did you modify in consequence?
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 study extra.
