It's never too early to plan for retirement.
The days of meeting face-to-face with a financial advisor aren't gone, but now you can skip that task altogether and opt for using retirement planning apps instead.
"For retirement, my rule of thumb is [to save] 10% [of income], at least," Sam Boyd, financial advisor and senior vice president of Capital Asset Management Group, Inc., told TheStreet.
TheStreet decided to review three retirement planning apps -- Stash, Acorns and M1 Finance -- and tell you how they stack up against each other.
Their similar features are:
- Investments and retirement accounts offerings
- SIPC (Securities Investor Protection Corporation) insured up to $500,000
- Automatic withdrawals from checking account
- 2 to 4 business days for withdrawals
Here's more about the apps.
- Backstory: Launched in October 2015 by Brandon Krieg and Ed Robinson, who both worked for global investment bank Macquarie Group Limited.
- Location: New York City
- Monthly Fee: $1 for Stash Invest accounts with less than $5,000 and 0.25% for accounts with more than $5,000; $2 for Stash Retire accounts with less than $5,000 and 0.25% for accounts with more than $5,000.
- Minimum Deposit: $5
Stash helps you invest in a variety of funds while attempting to lessen the intimidation factor that can come with financial planning.
"We try to make it clear that investing is for everyone," said Ally Federbush, head of communications at Stash. "[The app] is loaded with education and explains tons of difficult terms and financial specifics in a way that anyone can understand."
- Backstory: Founded in August 2014 by the father-and-son team Walter and Jeff Cruttenden. Walter was the founder and CEO of investment banking firm Roth Capital; Jeff is a co-manager of Cruttenden Partner, his family investment entity.
- Location: Irvine, Calif.
- Monthly Fee: $1 for investment accounts with less than $5,000 and 0.25% for accounts with more than $5,000; $2 for Acorns Later, which are IRAs
- Minimum Deposit: $0 to open account, $5 to start investing
Acorns is what's known as a robo-advisor app. It automatically withdraws funds from a checking account and invests it into one of five portfolios, which range from conservative, less risky, to aggressive, more risky. Within the portfolios are a mix of bonds and stocks with the more aggressive portfolios holding more stocks, while bonds make up most of the conservative portfolios.
Acorns also offers the option of making micro deposits, called round-ups. For example, if you buy a soda for $1.50, it records the remaining 50 cents in change from $2 until enough transactions' extra change total $5. That's when it withdraws the $5 from your checking account and adds it to one of your Acorns accounts. It's way to help you save extra money, putting "pocket change" in a digital jar, so to speak.
The app also has partnerships with retailers and other companies, such as Under Armour Inc. (UA) , Old Navy, owned by The Gap Inc. (GPS) and T-Mobile (TMUS) (owned by Deutsche Telekom AG), which can add bonus funds to the account if a user shops at a store or signs up for certain offers.
3. M1 Finance
- Backstory: Launched September 2016 by Brian Barnes, a former associate at L.E.K. Consulting.
- Location: Chicago
- Monthly Fee: None
- Minimum Deposit: $100 for investment
M1 Finance takes a different approach from the other two apps in that it requires more money to set up an account. It also lets users invest in fractional shares of a company, which can be as low as one penny. Apple Inc. (AAPL) , anyone? Users create "pies" that are a mix of stocks, ETFs and bonds. While there are no monthly or trade fees, there are miscellaneous ones for money wires and paper statements.
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