After doing my first free Empower monetary skilled evaluation again in 2013, I made a decision to do one other funding portfolio evaluation with them. Given the portfolio evaluation is free for anybody with over $100,000 in investable property, and my monetary state of affairs has modified so dramatically since then, I figured, why not spend just a little time to uncover potential optimization alternatives?
I additionally needed to expertise the method firsthand once more, in case any of you wish to make the most of their free monetary evaluation as properly. Total, I discovered it to be a worthwhile and academic expertise. You possibly can join right here if as soon as you have opened up a free account and linked your property.
For background, I have been utilizing Empower’s free wealth administration instruments because the finish of 2012. I even consulted with them part-time of their San Francisco workplace in 2013 and 2014 after they have been nonetheless referred to as Private Capital. Lastly, Monetary Samurai is a long-time affiliate associate.
Empower’s Free Skilled Evaluate of My Retirement Portfolio
When you join a free Empower account and hyperlink a minimum of $100,000 in investable property, you possibly can schedule a free monetary evaluation. The method consists of 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 id and achieve a fundamental understanding of my monetary state of affairs, targets, and needs. Be aware: you could have linked a minimum of $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 start out withdrawing from my rollover IRA after 60, and my purpose of sustaining a snug retirement with about $60,000 a 12 months 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 evaluation, 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 have been much like how I make investments my general public funding portfolio.
The Second Name: A 40-Minute Suggestion Session
Per week later, we had the follow-up telephone name. I logged into my Empower dashboard so he might stroll me by way of 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 property, he launched Empower’s Personal Consumer service, for many who have a minimal of $1 million in investable property. As a Personal Consumer, 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 subsequent slide broke down my IRA allocation. I discovered that 99.6% of my holdings are in U.S. property—proof of my home-country bias. About 97.5% is in U.S. shares, with the remaining 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 beneficial 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 considerations and political dangers. Aside from Taiwan Semiconductor (Ticker: TSM), I’ve stayed U.S.-focused. Fortuitously, that’s labored out properly. U.S. shares have outperformed for over a decade (although 2025 has been a uncommon 12 months 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 value is already in actual property. I didn’t ask which overseas markets they meant. Price asking in case you take the evaluation.
A 20.9% gold allocation would’ve been good, given gold’s report 2025 efficiency.
At solely 13.6%, the bond allocation appeared gentle 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 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 methodology of setting up portfolios by evenly weighting throughout fashion, dimension, and sector, as an alternative of following a market-cap index dominated by the most important names.
The concept: diversify away from bubbles and cut 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. Nevertheless, I’m based mostly in San Francisco and am a robust believer in tech, so I’m nice staying chubby. Nonetheless, if this have been your solely portfolio at age 48, having 70% in a single sector can be thought of extreme.
As an illustration, my IRA fell from $1.115 million to $827,000 in 2022, a 26% drop. That’s practically 5 years of residing bills gone in a single 12 months, if my $60,000 annual residing bills true.
Good Weighting Might Outperform The S&P 500 Throughout Troublesome 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 in an effort to keep 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 feel the excellent return state of affairs in retirement is gradual and regular returns. I don’t prefer to see greater than a ten% downward swing in my web value in a 12 months, which is why my web value is so diversified.
In your name with the Empower advisor, ask:
- What’s the drift threshold (%) per sector / fashion / dimension that triggers a rebalancing commerce in Good Weighting?
- How do you stability 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 also help with broader financial savings and withdrawal methods, an space even essentially the most disciplined FIRE lovers usually battle with. Having skilled steering right here could make a significant distinction.
Figuring out how a lot to avoid wasting on your youngsters’s schooling 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 put up 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 may also help cut back tax drag and decrease general portfolio threat.
Property Planning Is Necessary However Typically Uncared for
Lastly, property and legacy planning would be the most missed but important space of economic 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 may also help you reduce property taxes and guarantee your wealth is distributed as meant.
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 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 an enormous worth add.
A Retirement Forecast
Lastly, we wrapped up the decision by reviewing what my retirement might appear to be beginning at age 60, simply 12 years from now, if I adopted Empower’s suggestions. You possibly can mannequin comparable situations your self utilizing their free wealth administration instruments by adjusting your individual enter assumptions.
Typically, you wish to goal a minimum of a 90% likelihood that your portfolio will assist your retirement targets. Ideally, you purpose 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 12 months, receiving $37,416 yearly in Social Safety, and having $1,519,000 in my IRA invested per Empower’s suggestions – I’m comfortably on monitor.
In actual fact, if I reside to age 92, the projection exhibits I’d go away with practically $4 million left over. This outcome, ending up wealthier in loss of life than at retirement, is definitely fairly widespread when following the 4% secure withdrawal rule.
That’s why, when you formally retire, it’s properly value conducting an in depth monetary evaluation of your state of affairs and operating a number of withdrawal fee situations. Doing so may also help make sure you strike the precise stability between residing properly immediately and never operating out of cash tomorrow.
Given I don’t wish to die with a web 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 just a little. Even at that stage, $96,000 nonetheless represents only a 4% secure withdrawal fee 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.
The Course of Of Hiring Empower
Total, I assumed the 40-minute free monetary session was worthwhile for understanding the place my IRA portfolio stood. It feels nice figuring out that if I could make it to age 60, I shouldn’t have any drawback spending a minimum of $96,000 a 12 months 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 fearful.
Empower makes use of BNY Pershing as its custodian, so in case you determine to have them handle your cash, you’ll merely fill out a switch kind and transfer your present property to Pershing. Having transferred over $1 million portfolios earlier than to get a greater mortgage fee, I do know the method is easy. You simply fill out a permission kind on-line and it takes a number of days.
Capital Beneficial properties Taxes Due To Rebalancing
My essential concern was the tax hit from rebalancing. Paying capital good points 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 along with your tax advantaged accounts. Alternatively, you would have them handle a smaller taxable brokerage account, ideally near the $100,000 minimal. This method helps reduce your tax liabilities. And in case your portfolio already follows a Good Weighting fashion 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 purchasers with lower than $1 million
- Personal Purchasers:
- 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 person enjoys paying administration charges, these charges are decrease than massive 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 an in depth relative’s account totally free. 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 likewise needed to half methods along 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, haven’t got the time, and wish holistic monetary steering, Empower is value contemplating. You possibly can strive them for a 12 months, be taught from their method, after which determine whether or not to proceed paying or return to managing your cash your self.
Many buyers have missed out on big good points this cycle as a result of they saved an excessive amount of in money, paralyzed by indecision. I’ve met lots of them and have been all the time shocked to see how a lot money that they had relative to their web value. Hiring a disciplined advisor might’ve helped them steadily make investments and construct wealth.
On the flip facet, some buyers are too aggressive, buying and selling too usually, promoting close to the underside, and leveraging close to the highest. These people might 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 nice. However it’s nonetheless sensible to get knowledgeable check-up yearly or two to make sure we’re on monitor. 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 solution to get that second opinion, and perhaps uncover a number of methods to optimize your wealth alongside the best way.
Grateful For My Evaluate
Even after many years of managing my very own cash, I discovered worth in getting a contemporary, skilled perspective. Empower’s free monetary evaluation gave me larger readability about my retirement plan and confidence that my present technique nonetheless aligns with my long-term targets. 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 abruptly feels proper across the nook.
My power isn’t what it was once, however my tasks have solely grown with two younger youngsters and a stay-at-home spouse relying on me. The strain 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 evaluation 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 evaluation, what are some belongings you found about your portfolio and your general funds? When was the final time you had a evaluation 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 be taught extra.
