Empower Review: Free Net Worth and Budget Tracking

Who is Empower best for?

• Seasoned investors
• Investors who want help planning their retirement
• People who want access to a real-life financial advisor
• People interested in net worth tracking

In my experience, Empower is a little harder to use than other free budgeting and financial planning tools. Therefore, I think it’s best for someone who has dabbled in the waters of investing and retirement planning already.

If you’re a newbie, there are more intuitive apps, like Rocket Money, that are easier for messing around with your budget. Empower, on the other hand, is for people ready to take the next step in their financial planning.

It’s also a good tool for someone who’s ready to meet with a financial advisor and get help with wealth management. If you have over $100K to invest and want to hand off the task of financial planning and investment portfolio diversification to an expert, signing up for advising could be worth considering.

Depending on how much you have to invest, the service can even include estate planning and access to a team of multiple financial specialists.

Empower’s free offerings

Empower’s free financial planning app is called the Empower Personal Dashboard™. Here’s an overview of each free investment and budgeting tool it offers:

Net worth tracker

Empower keeps a running tally of your net worth. Your net worth is calculated by subtracting your assets, such as cash, credit accounts, retirement accounts, investments, and property, from your liabilities, such as your mortgage, student loans, and credit card debt.

One big hiccup I noticed when I signed up was that Empower didn’t import any of my balance histories. It only starts tracking that from the day you sign up, which isn’t great if you want to look further back in time.

Retirement planner

Empower can tell you how on track you are for retirement, given your target retirement date. It’ll ask you to input your current savings, as well as what you hope to save each year. You can also add in goals you’re saving up for, like a new car, and it will account for these in your retirement projections.

I like how this feature also accounts for estimated Social Security payments. You can even change your estimated effective tax rate, inflation rate, and life expectancy to see how that alters what you’ll need to save for retirement.

Budgeting planner

Empower’s budgeting planner lets you review expenses. When I added my credit card accounts, it automatically sorted all of my purchases into different categories to show me exactly how much I was spending on certain things.

However, the app seems to lack any budget planning tools. For example, I couldn’t see any way to set spending targets or create an alert for when I overspend. Other budget planning apps, like SoFi Relay, have built-in budget tracking tools to help you lower your spending.

Cash flow planner

With the cash flow planner, you can review what money is coming in and going out each month. The dashboard lets you clearly see your income versus your expenses in a line chart for visual clarity. It even compares your spending with the same time last month so you can see if you’re saving more or less money.

While this tool gets the job done, I think it could be more robust. For example, Rocket Money’s cash flow tool breaks down your bills into far more categories, including large purchases, recurring bills, and more, making it easier for actually pinpointing areas to improve your cash flow.

Investment checkup

After inputting your estimated monthly spend in retirement and answering a couple of other questions, the investment checkup tool can help you compare your current asset allocations against a recommended target. When I tried it myself, it recommended that I add bonds to my portfolio and invest in more index funds.

While these are good recommendations, they’re kind of generic — especially without any information on what bonds or index funds to invest in.

Empower’s paid financial advising

Empower has three financial advising tiers: Investment Services, Wealth Management, and Private Client. You can take advantage of these tiers with both retirement and taxable brokerage accounts. All levels can also provide advice on 401(k) allocations.

Here’s an overview of what’s included and how much each cost:

	Investment Services	Wealth Management	Private Client
Minimum investment required	$100K to $250K	Over $250K to $1M	>$1M
Annual fees	0.89%	0.89%	0.49% to 0.79%
Investment types	Exchange-traded funds (ETFs)	Exchange-traded funds (ETFs) Individual stocks	Exchange-traded funds (ETFs) Individual stocks, bonds, and private equity investments
Features	Digital finance tools Tax optimization Financial and retirement planning help	Two dedicated financial advisors Customized portfolio with regular reviews Access to insurance, real estate, and finance experts	Access to the investment committee Private equity investment opportunities (available to clients with $5M or more invested) Access to specialists for wealth planning Private banking services

Clients within these tiers get all the benefits of the free tools — such as the fee analyzer and retirement planner — plus these portfolio management features:

• Smart Weighting™: Smart Weighting is Empower’s proprietary indexing method that helps to balance exposure by diversifying your portfolio across different economic sectors.
• Tax optimization: Empower optimizes investments for taxes by building portfolios with tax-efficient stocks and ETFs and avoiding mutual funds. Empower clients also benefit from tax-loss harvesting, a process where capital losses are used to offset capital gains.
• Intelligent rebalancing: Portfolios are automatically reviewed daily for rebalancing opportunities.
• Dynamic portfolio allocation: Empower will make portfolio allocation recommendations as you progress through life.

Full disclosure: I didn’t test out these wealth management tools because I didn’t want to move my money around. But in my opinion, the fees are a bit high compared to similar online tools like Betterment and Wealthfront.

That said, they are cheaper than traditional financial advising options. The average advisory fee of the over 1,350 registered investment adviser (RIA) firms surveyed by RIA in a Box is 0.96%.

Cash management account

Aside from the investment tools, Empower offers the Empower Personal Cash Account that’s FDIC insured up to $5 million.

This is far higher than most other savings accounts that only offer $250,000 in FDIC insurance. Even other cash management accounts, like the Betterment Cash Reserve, only offer up to $2 million in FDIC insurance.

You’ll also earn 4% APY, which is far more than the national average interest rate. However, it’s on the lower side when compared to other cash management accounts. For example, Betterment currently offers up to 4.25% (as of Dec. 2, 2024) APY on its account.

Empower alternatives

	Annual fees	Minimum investment	Cash management account APY	FDIC insurance
Betterment	0.25%	$0	up to 4.25% (as of Dec. 2, 2024)	Up to $2 million
Wealthfront	0.25%	$500	4.50%1 <p>Rate is current as of November 3, 2023.</p>	Up to $8 million
Robinhood	$50	$0	4.25% (as of 11/15/24)2 <p>Annual Percentage Yield. Rate valid as of April 12, 2024. To earn interest, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Interest rates for cash sweep and margin investing can change at any time. Fees may reduce interest earnings.</p>	Up to $2.5 million

If you have less than $100K to invest with Empower, Betterment, Wealthfront, and Robinhood are options to consider.

Betterment

Betterment sets investors up with automated portfolios based on savings goals. It also offers a savings account with a higher-than-average APY and a cash management account you can use for short-term goals, like saving for a vacation or kitchen remodel.

In the app, you can track your account balances, portfolio performance, and net worth. Betterment’s annual fee is just 0.25%, no matter your balance, making it a more affordable option than Empower. However, if you want to upgrade to Premium, you’ll pay a 0.65% annual fee for personal advising services.

Overall, Betterment is a better option for casual investors who might not need in-person help from a real financial advisor. If you’re comfortable let an algorithm determine your investment allocations, Betterment works just fine. But if you have a higher balance and want personalized assistance, look into Empower instead.

Read our Betterment review.

Wealthfront

Wealthfront is an investing app that offers automated personalized index-fund portfolios and cash accounts. You can monitor your net worth and your financial accounts in the app as well. The annual advisory fee is 0.25%, and you need just $500 to get started.

Wealthfront also invests solely in low-cost index funds, which could be a turnoff if you want more variety. With Empower, you can invest in everything from ETFs to individual stocks and bonds if you meet the private client tier, offering you more flexibility.

If you’re looking for hands-off investing and don’t have a lot of money to get started, Wealthfront is the better option.³ <p class="">FinanceBuzz receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. FinanceBuzz is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.<br></p>

Read our Wealthfront review.

Robinhood

Robinhood’s claim to fame is no commission fees on stocks, ETFs, and its options.⁴ <p>Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the <a href="https://cdn.robinhood.com/assets/robinhood/legal/Characteristics%20and%20Risks%20of%20Standardized%20Options.pdf">Characteristics and Risks of Standardized Options</a> before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.</p> <p>Robinhood Financial does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. Supporting documentation for any claims, if applicable, will be furnished upon request.</p> <p>Financebuzz is compensated by Robinhood to produce this content.</p> This means you can trade as much as you want without penalty, making it a better option for day traders or newbies who just want to mess around with the stock market.

Robinhood also offers margin trading and crypto investing if you’re seeking alternatives. Empower, on the other hand, is far more limited in its offerings and is more geared toward traditionalists who want to play it safe.

Empower has far more retirement planning tools than Robinhood, making it good for investors concerned about their future. But if you are looking to jump into initial public offerings (IPOs) or buy fractional shares, then Robinhood is much easier to play around with.⁵ <p>All investments involve risk including loss of principal. Interest is earned on uninvested cash swept from your brokerage account to program banks. Robinhood is not a bank. For margin enabled customers, to earn interest through the cash sweep program, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest.</p> ⁶ <p>Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of the Robinhood Customer Agreement. All investments involve risk and loss of principal is possible.</p> <p>Robinhood Financial LLC (member SIPC), is a registered broker dealer.</p>

Read our Robinhood review.

FAQs

Bottom line

Empower aims to give you a 360° view of your finances to help you learn how to invest money. Managing money day-to-day is important, but when you want to project out 10, 20, or 30 years from now to see how on track you are to meet your goals, a service like Empower could be worth signing up for.

That said, if you’re still new to the world of finance and aren’t quite ready to use financial advisor services, then there are plenty of other investment apps that might better meet your needs.