Who Should Consider Betterment?
Betterment is a great option for those aiming to invest with clear, long-term goals like saving for a home, building a college fund, or preparing for retirement. The platform requires no minimum deposit to open an account, though investing begins with a $10 minimum. Betterment is ideal for individuals looking for a simple, yet effective way to grow their savings for major financial milestones.
How Betterment Works
To get started, users provide basic information, such as age, income, and Social Security number. Next, they select financial goals, which may include building an emergency fund, long-term investing through a taxable account, or saving for retirement via an individual retirement account (IRA).
How Betterment Manages Investments
Betterment builds diversified portfolios using low-cost ETFs that track established indexes. The investment mix is tailored to a user’s profile and goals.
- Broad Impact: This socially responsible investing (SRI) option focuses on companies that meet environmental, social, and governance (ESG) criteria.
- Climate Impact: Specializes in companies involved in green projects and reducing carbon emissions.
- Social Impact: Focuses on businesses promoting gender diversity and minority employment.
- Innovative Technology: Targets cutting-edge sectors like clean energy, robotics, virtual reality, and blockchain, suited for those comfortable with higher risk.
- Goldman Sachs Smart Beta: This portfolio employs advanced diversification techniques aiming for higher returns at low costs.