Blooom Review: Manage Your 401k Like a Pro

Investing
June 23, 2020
Written by Drew Cheneler
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In this article, a Blooom Review. Today, we unveil an in-depth review about Blooom. By the end, you will know what Blooom specializes in, how it works, if it is the right fit for you, and what alternatives are available.

Blooom Review: What is It? Can It Optimize my 401k?

Blooom – Quick Overview

Managing your employee sponsored 401k, TSP, 403b, 401a, 457, or Roth IRA is a stressful and an utter hassle. Whether you are working two jobs, a stay at home parent, or boggled down by your standard 9 – 5 job, most of us lack the necessary time and knowledge to successfully monitor our employee sponsored or individual retirement investment accounts. Fortunately, there is a neat financial service called Blooom that makes this process straightforward, painless, and profitable.

Annual Fee: $120 (or $108 if you pay up front)

Account Minimum: $0

Why we like Blooom:

  • Specializes in Optimizing Employee Sponsored Plan’s
  • Free Analysis
  • Straightforward & Easy-to-Use

A Complete Blooom Review

Founded in 2013 by Randy AufDerHeide, Kevin Conard, and Chris Costello, Blooom is tackling and providing solutions to some of the hardest financial questions:

  • How Should I Invest My Retirement Account?
  • How do I manage my Employee Sponsored 401k Plan?

Blooom is a Robo-Advisor that specializes in optimizing your employee sponsored 401k and individual retirement accounts (Roth IRAs). With over $3 billion in assets under management, Bloom has attracted a legion of fans – rightfully so. To date, they have already saved over $1.2 billion dollars for their die-hard customers by retirement.

Blooms Guiding Belief: 

“We are founded on the belief that professional retirement help should be smart, simple, and available to all Americans.” – Blooom

Blooom: How Does it Work? And What Does it Do?

Fret not, Blooom is hands down the easiest financial service to work with. Unlike other robo-advisors, they do not require you to move your employee sponsored plan or IRA to another platform. You retrain complete control over your account.

Once you sign up, Blooom will begin by asking you a few simple questions, such as age, financial goals, and expected retirement age.

Blooom - A financial service company that specializes in 401k optimization.

Source: Blooom.com

Like all modern FinTech companies, Blooom relies on complex and advanced algorithms to optimize your 401k or IRA. From here, they will provide you with an in-depth portfolio analysis. Blooom will compare your current asset allocation to their ideal asset allocation, and will delve into your portfolio’s diversification.

Within 10 – 30 days, Blooom will make careful and calculated responsible adjustments to your portfolio. For example, if you are near retirement, they will increase your bond allocation. Likewise, if you are a young adult, then Blooom will increase your stock allocation.

What does blooom invest in?

It is important to note, that Blooom invests primarily in low-cost index funds or ETFs. They will not adjust your portfolio if you are invested in individual securities. Instead, they will recommend you to decrease your individual securities position to less than 20%. Again, Blooom is here to mitigate your risk and maximize your returns over a long-time frame, not short.

Don’t worry, it does not end there. Once Blooom makes the careful and meticulous portfolio adjustments, they will monitor your account 24/7 and will make changes when appropriate.

Focuses on Low Fees

As your new robo-advisor, Blooom actively seeks to invest in low cost index funds and will try their best to eliminate costly funds. Blooom does this by getting rid of expensive target date funds, divesting in managed accounts, and bring to fruition hidden investment fees.

Again, Blooom is in the business of optimizing your portfolio, and if they find a clear gap or downfall in your strategy, they will make the proper adjustments to ensure you remain on track for a safe retirement.

Blooom Standout product Features

By now, you can begin to understand how Blooom works and if it is the right fit for you. Below are some key product features that make Blooom standout from its competitors.

Expose Hidden Investment Fees

Bloooms algorithm works around the clock to expose hidden investment fees that are buried within your portfolio.

Automatic Account Rebalance

Over time, Blooom will make the needed adjustments to your portfolio as you near retirement, change your risk tolerance, or amend your financial goals.

Robust Security Protection

Utilizing 256 – Bit Encryption, Blooom recognizes the growing threat of identity theft and fraud protection. Their team, will monitor your account 24/7 and will notify you immediately if there are any unusual behaviors.

Meticulous Investment Selection

Backed by a team of seasoned investment professionals, Blooom knows exactly what to invest in and tailors their service to meet the needs of each individual. So yes, they do the investing research for you!

Complete Access to Financial Advisors

Blooom offers access to reputable financial advisors via online chat or email.

Free Analysis

If do not want to pay for their service, then I urge you to try out their employee – sponsored 401k free analysis. By the end, Blooom will provide you tailored insights into your diversification, expose hidden fees, and will provide simple adjustments for you to make on your own.

Blooom Review: What Are the Benefits of Using Blooom? What Should I Look Out for?

Like all companies, there are pros and cons to using Blooom to optimize your 401k portfolio.

Blooom Pros:

  • Free Analysis
  • Automatic & Strategic Account Re-balancing
  • Easy-to-use Platform allowing you to sign up and get started quickly
  • Robust Security (256 Bit Encryption) & Customer Support
  • No minimum Account Balance
  • Specializes in Employee Sponsored Plans
  • Do Not Need to Transfer your Account to another Platform
  • Receive Tailored Insight’s from Financial Advisors

Cons:

  • Relatively Expensive; however, over time the monthly fee pales in comparison to a 1.0% annual investment fee. $120 Annual Fee.
  • Only Manages IRA Accounts through Fidelity, Charles Schwab, or Vanguard.
  • No Phone Support. Can only contact via online chat or email.

As you can see, Blooom comes with a myriad of advantages and few disadvantages. Though the fee may seem intimidating, over a long-time frame this fee is obsolete compared to the amount of savings your account will experience.

Blooom Pricing: How Much Does it Cost?

Blooom has a straight forward price. Today, Blooom is currently offered at $120 per year, which boils down to $10 a month. Better yet, Blooom will drop the fee down to $108 if you pay up front.

  • Annual Fee: $120
  • Monthly Fee: $10

The only downside is if you have a small account balance, but if you are well into your career, then this $120 annual fee is minimal for a service that can drastically change your portfolio’s performance.

However, they do offer a robust free analysis tool, which is a great starting point for you if you are still unsure whither or not to use this specialized financial service.

Blooom Review: Who is it Best for?

Blooom brings much needed financial clarity to employee sponsored plans and individual retirement accounts. If you are struggling with optimizing your employee sponsored plan then Blooom is the perfect fit for you.

Within a few days, you will have a well oiled 401k or individual retirement account. With almost no alternatives in this market, Blooom is well positioned to assist you.

However, before you commit it is best to double check that Blooom is worth the $120 annual fee. Again, if you are new into your professional career then it is best to hold off for a year or two as you build up your employee sponsored account with the necessary funding. Conversely, if you are well into your career and near retirement, then this may be the ideal time to tap into the niche services Blooom provides.

Drew Cheneler
Drew Cheneler
Drew is a recognized Credit, Small Business, and Personal Finance Expert. He has been quoted in CNBC, The Huffington Post, Business.com, Moneyunder30, and more. He is known for breaking down complex personal finance topics into action-oriented advice, so you can make the most of your hard-earned money.