A recent article highlights a retirement issue, "lost" 401k accounts. It is estimated that 24 million accounts containing $1.35 trillion in assets have been left in 401k accounts when someone leaves an employer. And while these can be claimed easily, we want to make sure that you don't forget about a retirement account. You can often leave a 401k account with an old employer if you like the options and costs available, but you can also roll over the account tax-free into an IRA. We did want to point out one sentence in the article:
Those robo accounts have returned almost 9% annually over the past three years, while popular S&P 500 ETFs have seen annualized returns of nearly 14% over the past 10 years.
Over the past three years, it is even worse for robo advisors as the S&P 500 has returned about 18 percent over that period. One important caveat is that robo advisors likely have a more diversified portfolio, including bonds and money market accounts. This would reduce the risk of robo advisor accounts, but, as you see, can also reduce the return.
