June 17, 2018 8:00 PM PT

How I could earn an extra $22K on my 401k in 20 minutes

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There is no shortage of advice on how to build or improve your 401(k) portfolio. But even if you try to follow all the advice, how do you know how your 401(k) is doing?

After all, most everyone has done very well in the market over the past couple of years. So it's pretty likely that your 401(k) balance has grown. But has it grown as much as it should have?

Enter Blooom, the service that'll analyze and improve your 401(k) for you.

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Are your funds gouging you with high fees?

Are you taking on too much risk in your portfolio?

Read on.

Step 1: Create an account

Literally just enter your contact info, birthday, and the age you hope to retire (50, but probably 55). I LOVE how Blooom gives you the option to retire earlier than 65!

Step 2

Pick out your 401(k) plan provider and enter your credentials:

Note that it took a full minute for the website to connect with my Fidelity account.

Step 3: Get advice

Upside: This is a beautiful, easy-to-understand user interface.

Downside: I got a thumbs-down for everything!

After clicking Next….

Enter the Next piece of Blooom's advice: It says my investment mix is too risky, given my desire to retire in 20 or fewer years:

This would be great advice IF I didn't have a number of other accounts that were much, much less risky than this one. If you want to retire early, you won't have as much time to recover from any major market "corrections" that could happen. It makes sense that Blooom is telling me to reduce the risk in my portfolio for this reason. But my overall investment mix, when you look across all seven of my accounts, is much less risky than this.

After clicking Next, Blooom summarizes it all, along with the note that I could earn an extra $22K! This is HUGE, since this account has only about $71K in total.

Bottom Line

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Blooom is saying it can:

  1. Help lower fees
  2. Help you avoid making poor decisions when the market changes

Regarding #1, my average expense ratio is very low, so I'm skeptical about the $1,600 figure. HOWEVER, I agree with Blooom that it's important to focus on the cost of investing. Kudos to them.

Overall: $7.50/month is a small price to pay if you want a service that finds good investments and manages your portfolio. Blooom might not be for you, though, if you have numerous investment accounts or complicated investments.

Disclaimer: Opinions expressed here are those of the author's alone. Please support CreditDonkey on our mission to help you make savvy financial decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

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