In this article, we will cover:
- Changing to different investment allocations within the same type of strategy, such as from a Moderate Risk-Based portfolio to a Growth Risk-Based portfolio. Or, for example, from a Target Date Fund 2030 to a Target Date Fund 2035.
Changing investments from one allocation type to another, such as from a Target Date Fund to a Risk-Based Plan this article, we will cover:
- Changing to different investment allocations within the same type of strategy, such as from a Moderate Risk-Based portfolio to a Growth Risk-Based portfolio. Or, for example, from a Target Date Fund 2030 to a Target Date Fund 2035.
- Changing investments from one allocation type to another, such as from a Target Date Fund to a Risk-Based Portfolio or creating your own customized asset allocation.
- Rebalancing
- Automatic Rebalancing
- Manual Rebalancing
- One-time Rebalancing
How to select a different asset allocation or model within the same strategy
As a participant in your plan, you always control your investments, and you are solely responsible for making your investment decisions. Vestwell does not provide legal, financial, tax, or other investment advice to any individual. Our platform enables you to change your investments using different methods. Once you make a change, your existing balance and all future contributions (including your own contributions and any employer match or other contribution) will be updated to reflect your changes. In general, it takes approximately five business days for your changes to be reflected in your account portal. The balance and allocations displayed on your participant portal will not be updated until all investments are exchanged and trades settle. We suggest that you refrain from making any additional investment changes until the rebalancing process has been completed.
- For Age-Based Strategies: To change to a different Target Date Fund, adjust your intended retirement age in the input control panel you may increase or decrease your desired retirement age to move into a different target retirement date fund. Remember, the closer you are to the date of the Target Date Fund, the more conservative the investment mix. For example, if you select a 2030 Target Date Fund, the combination of investments within that fund will be more conservative than the mix of investments in a 2050 Target Date Fund.
- For Risk-Based Strategies: To select a different risk model, adjust your risk tolerance in the input control panel. Select a more conservative or more aggressive strategy on the slider to invest in a different risk model.
- For Custom Allocations: To change your custom allocation, click ‘Adjust Allocation’ and change the allocations of your selected investments.
Select the percentage for each fund you wish to invest in; the total percentage of the funds you select must add up to 100%.
When you’re finished, click ‘Update Allocation’ to save your selections.
- For Goals-Based Strategies: You can adjust your current salary, retirement age, retirement income goal, or risk tolerance to receive a new suggested allocation mix and retirement income projection from the Goals Optimization Engine (“GOE”). Executing the suggestions in your goal feedback gap, if any are provided, will also create an updated recommendation from GOE which may help meet your stated retirement income goal.
When opting into the goals-based strategy, you also have the option to include Social Security and Outside Accounts such as non-Vestwell Savings, Retirement, or Brokerage accounts in your retirement income projection. This may provide a more comprehensive view of your retirement planning assets beyond your workplace retirement plan.
Add these sources of retirement income by selecting 'Adjust Inputs' and add Social Security or add Outside Accounts:
- Select the Social Security box and select an age range from when you would like to draw Social Security. The minimum age is 62 and the maximum age is 70. Click 'Apply Changes'
- Click 'Add Account' select the account type, fill in the required fields and click 'Apply Changes' a summary window will display to showcase the changes on your account.
Once saved, you will see the breakdown of your retirement income projection by income source. If after adding the additional sources you believe you may not achieve your targeted retirement income goal, you will see a few suggestion cards such as Save More, Retire Later, or Spend Less in Retirement.
If you choose to execute the suggestions, your retirement profile will be readjusted to fit what you have chosen and your overall retirement income projection will be updated.
How do I change to a different strategy?
When changing your investment strategy for future contributions, changes should be effective after a 2 to 3 business day window. Change your strategy through the following steps:
From your ‘Overview page’ select ‘Manage Investments’ and then click ‘Change Strategy’
Depending on the investments selected by your plan investment fiduciary, you will see up to four strategies:
- Age-Based: Provide your desired retirement age in the setup wizard. You’ll be matched with the target date model that most closely approximates your stated year in which you plan to stop full-time or part-time employment. . The asset allocation within the Target Date Fund will become more conservative as you approach your target retirement year.
- Risk-Based: You may select or change your risk tolerance on the slider in the setup wizard from More Conservative to More Aggressive to be placed into your chosen risk model.
- Custom Allocation: Select from the available investment options and customize your selections until you create a portfolio that is 100% allocated across your selected investments.
Important reminder: When selecting your mix of stocks and bonds funds, your allocations must equal 100%. The ‘Select This Strategy’ button is only active or “blue” when the Fund Selection equals 100%. Click “Select the Strategy” to change your allocation.
If you click “Continue Using Current Strategy,” your investment selection will not change.
Goals-Based: Provide your desired retirement age, current income, and your retirement income goal in the setup wizard. Franklin Templeton’s Goals Optimization Engine (GOE) provides a portfolio option that optimizes your chances of meeting your retirement goal using these data points and other information that you may provide in your profile.
How do I adjust my automatic rebalancing settings?
Market fluctuations may cause some of your investments to appreciate or depreciate, so our tool by default will rebalance your portfolio on a quarterly basis automatically and on each occasion when you change your investment strategy. Generally, the rebalance will occur on the first day of each quarter. If you would like to turn off this feature, please see the images below.
To turn this feature off, click on ‘Rebalance Settings’ on your Manage Investments page and toggle ‘Automatic Rebalance’ to ‘Off.’
How do I perform a rebalance of my portfolio?
When rebalancing your portfolio changes should be effective after a 5 to 6 business day window. Rebalance your portfolio through the following steps:
You can also rebalance your portfolio at any time. Click on ‘Rebalance Settings’ on your Manage Investments page and click ‘Rebalance’ on the ‘One-Time Rebalance’ button. Confirm your asset allocation and apply the changes, which will be reflected on the portal within a few business days. All of your existing and future contributions will be invested accordingly.
How do I invest future contributions into a new strategy and leave my existing account balance in my current strategy?
Go to your Manage Investments page and click on ‘Rebalance Settings.’ Toggle ‘Automatic Rebalance’ to “Off.’ This will prevent your existing investments from being rebalanced if or when you change to a new investment strategy. Next, return to your Manage Investments page and click ‘Change Strategy.’ Select your new strategy and apply changes. All future contributions will be allocated to the new strategy and your current holdings will remain in your previously selected strategy.
View our Trading Policies and Procedures, or go to the Plan Documents section of your portal.
We hope you found this article to be helpful, if you need further assistance please contact us at help@vestwell.com