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Comment by pram | Hacker News Reader

I rolled all my 401ks into an IRA on Betterment. They automatically buy Vanguard ETFs and some other stuff. Has some nice features like earnings projections and automatically setting your equity/bond composition (like you can set it to 10% bonds and it will automatically rebalance all your ETFs)

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If you just rolled your money into vanguard directly, you would avoid the .25% annual fee which is a lot of money compounded over time

Right, Betterment and Wealthfront primarily only if you don't want to do anything more than shoveling money into a single place.

I actually just left Betterment because over the last few years their Core portfolio has really lagged performance of my non-Betterment investments (largely VTI, VTSAX, VBTLX in approximately 80/20 stock/bond split). Upon ACATS-ing over to another broker, I found they'd purchased some funds with high fees when there were really similar funds available with far, far lower fees. The only reason I can think of to buy a higher expense fund when a much lower expense variant exists is in the name of tax loss harvesting, but even that is a really short-sighted decision.

"The only reason I can think of to buy a higher expense fund when a much lower expense variant exists is in the name of tax loss harvesting"

perhaps it's because they receive kickbacks from that specific fund.

If you're robo-investing, just use the Vanguard robo-investor directly. It has basically the same functionality and lower fees (about 0.15% once you count them crediting Vanguard fund expense ratios).

What fees does betterment have if any? What allocations have you opted for?

.25% on top of any investments you have through them, on top of the fund expense ratio https://www.betterment.com/pricing

That is 62k gone to fees assuming:

12k start, 12k put in per year. for 30 years at 7%.

People don't realise that the opportunity cost of those fees is compounding money.

In your example that 67k is 4.8% of your investments. And that's not including the fees of the ETF or mutual funds you get invested in.

I would never even think about touching this service - why would anyone use this?

Because it's easy. If someone's eyes glazes over before you get to the third Q in QQQ, and they're not going to entertain a conversation over Roth and 401k, some place to just money over to for retirement is very attractive.

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